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EZ Final Inflation Confirms Flash, But Services Contribution Up

EUROZONE DATA
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Eurozone Final HICP confirmed the March flash print. Energy and Unprocessed food both saw Y/Y disinflation between February and March, whilst Processed food, alcohol & tobacco and NEIG continued to see Y/Y disinflation. The March prints were confirmed at +2.4% Y/Y (vs +2.6% Y/Y in February) and +0.8% M/M (vs +0.6% M/M in February).

  • Similarly, core inflation on an annual basis printed in line with flash at +2.9% Y/Y (vs +3.1% Y/Y in February), although on a monthly basis it saw a rise to +1.1% M/M from +0.7% M/M in February.
  • At a country level: Slovakia saw a revision from flash HICP Y/Y up +0.2ppt, Spain and Lithuania saw a +0.1ppt revision to flash Y/Y HICP whilst Italy, Finland and Austria saw HICP revised down by 0.1ppt.
  • The final readings show the contribution from services inflation actually rose after two consecutive months of stalling, contributing +1.76ppt, the highest contribution since October 2023 and it remains the largest contributor to the headline inflation rate.
  • In contrast, Unprocessed food contributed negatively to headline reading for the first time since the Covid pandemic, printing at -0.02ppt (vs +0.1ppt prior).
  • Meanwhile, Processed food, alcohol and tobacco contribution fell to +0.55 ppt (vs +0.69ppt prior) - the lowest contribution since January 2022. In addition, NEIG's contribution fell again to +0.30ppt (vs +0.42ppt) - remaining the lowest contribution since July 2021.
  • Energy's negative contribution continues to fade as highlighted in our inflation insight as base effects continue to drop out of the Y/Y comparison, recording a contribution of -0.16 ppt in March (vs -0.36ppt in February).

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Eurozone Final HICP confirmed the March flash print. Energy and Unprocessed food both saw Y/Y disinflation between February and March, whilst Processed food, alcohol & tobacco and NEIG continued to see Y/Y disinflation. The March prints were confirmed at +2.4% Y/Y (vs +2.6% Y/Y in February) and +0.8% M/M (vs +0.6% M/M in February).

  • Similarly, core inflation on an annual basis printed in line with flash at +2.9% Y/Y (vs +3.1% Y/Y in February), although on a monthly basis it saw a rise to +1.1% M/M from +0.7% M/M in February.
  • At a country level: Slovakia saw a revision from flash HICP Y/Y up +0.2ppt, Spain and Lithuania saw a +0.1ppt revision to flash Y/Y HICP whilst Italy, Finland and Austria saw HICP revised down by 0.1ppt.
  • The final readings show the contribution from services inflation actually rose after two consecutive months of stalling, contributing +1.76ppt, the highest contribution since October 2023 and it remains the largest contributor to the headline inflation rate.
  • In contrast, Unprocessed food contributed negatively to headline reading for the first time since the Covid pandemic, printing at -0.02ppt (vs +0.1ppt prior).
  • Meanwhile, Processed food, alcohol and tobacco contribution fell to +0.55 ppt (vs +0.69ppt prior) - the lowest contribution since January 2022. In addition, NEIG's contribution fell again to +0.30ppt (vs +0.42ppt) - remaining the lowest contribution since July 2021.
  • Energy's negative contribution continues to fade as highlighted in our inflation insight as base effects continue to drop out of the Y/Y comparison, recording a contribution of -0.16 ppt in March (vs -0.36ppt in February).