Energy Drives Headline Increase To 3.1% Y/Y

Dutch March flash inflation was 3.1% Y/Y (vs 2.7% prior) and 0.6% M/M (vs 0.9% prior). The consensus, formed of just 3 analysts, looked for a softer 2.8% Y/Y.

• Flash CPI was also 3.1% Y/Y (vs 2.8% prior).
• The increase in the headline rate was led by food (2.8% Y/Y vs 2.7% prior) and energy (3.7% Y/Y vs 1.1% prior)
• Looking at the core CPI sub-components, services accelerated to 4.6% Y/Y (vs 4.5% prior). This is a theme also seen in the German and Italian flash data, increasing the risk of Eurozone-wide services inflation hovering around 4.0% Y/Y again later today (EZ services HICP has been exactly 4.0% Y/Y in each of the previous 4 months).
• Non-energy industrial goods remained in deflation at -0.2% Y/Y (vs -0.5% prior).
• Dutch headline CPI has steadily risen from its low of -0.4% Y/Y in October 2023, as energy base effects dropped out of the annual comparison.
• Similar dynamics r.e. energy base effects will eventually be seen in the other countries and the Eurozone overall, underscoring the narrative that the path back to the 2% target may be bumpy over the coming months.

Source: CBS