March 31, 2023 09:07 GMT
Services Inflation Boosts Core HICP to Fresh High
EUROZONE MAR FLASH HICP +0.9% M/M (FCST +1.1%); FEB +0.8% M/M
EUROZONE MAR FLASH HICP +6.9% Y/Y (FCST +7.1%); FEB +8.5% Y/Y
EUROZONE MAR FLASH CORE HICP +1.3% M/M, +5.7% Y/Y (= FCST Y/Y); FEB +5.6% Y/Y
- Eurozone HICP surprised to the downside in the March flash, cooling by 1.6pp to +6.9% y/y, two-tenths below consensus expectations. The downside surprise was likely aided by the 0.6pp miss on Italian HICP, which was lower at +8.2% y/y.
- Slowing energy prices (-0.9% y/y in March vs +13.7% y/y in February) and base effects drove the deceleration in annualised HICP.
- On the month, prices continued to accelerate, expanding by +0.9% m/m and implying that current price pressures remain acute. All member states recorded m/m HICP increases.
- Core HICP edged up by 0.1pp as expected in the March flash, to reach a fresh euro-era high of +5.7% y/y. Monthly underlying inflation was elevated at +1.3% m/m.
- This was largely boosted by service prices, which accelerated by 0.2pp to +5.0% y/y, outweighing the 0.2pp decelleration in non-energy industrial goods. Strong service activity is adding to service-inflation troubles, underpinning hawkish ECB rhetoric.
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