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Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
Eurozone inflation fell for the second month in a row in March to 2.2 per cent, as ECB rate-setters think about whether or not to sluggish the tempo of rate of interest cuts.
Tuesday’s determine was beneath February’s studying of two.3 per cent and according to the expectations of economists polled by Reuters.
The annual inflation determine remains to be greater than the ECB’s medium-term goal of two per cent. However rate-setters on the central financial institution imagine that a rise in headline inflation for the reason that autumn was momentary.
February’s preliminary determine of two.4 per cent was later revised down by 0.1 proportion factors.
The financial institution has signalled that it could sluggish the tempo of its fee cuts due to the inflationary dangers posed by the looming commerce struggle sparked by US President Donald Trump, in addition to elevated spending on defence and infrastructure.
Final month, the central financial institution reduce charges for the sixth time since final summer season to 2.5 per cent. However it burdened that “financial coverage is changing into meaningfully much less restrictive”, wording that advised a extra hawkish stance.
ECB president Christine Lagarde additionally warned final month that policymakers have been going through “exceptionally excessive” uncertainty. She added that this made it “not possible” to ensure that “headline inflation will at all times be at 2 per cent”.
Earlier than Tuesday’s launch, monetary markets have been pricing in a likelihood of roughly 75 per cent of one other quarter-point reduce on the subsequent ECB assembly on April 17, in accordance with ranges implied by swaps markets.
This can be a growing story
