MNI BRIEF: EZ Headline Inflation Slumps; Core An Issue For ECB
Eurozone headline inflation falls sharply as energy price base effects impact, but broader inflation remains sticky.
Eurozone headline inflation fell sharply in March, data from Eurostat showed, but there was little cheer for ECB policymakers as the core annual reading edged higher again. The headline reading fell to 6.9% y/y, down from 8.5% in February. However, the core reading rose to 5.7% from 5.6% last month, underlining the task ahead for the Governing Council.
ECB policymakers have said the broader inflation picture remains an issue when setting policy, although recent days have seen some of the Governing Council, including Bank of Portugal head Mario Centeno, remind his colleagues that the target is the headline reading.
Eurozone unemployment was unchanged at 6.6% in February, still hovering around record lows and confirming that the labour market remains tight.