Euro zone inflation slows as coronavirus cuts oil prices

Consumer prices rose 1.2% in year to February

An oil drilling ship pictured docked off the Lebanese coast.  Energy prices have dropped 0.3 per cent, Eurostat figures show. Photograph: Joseph Eid / AFP

An oil drilling ship pictured docked off the Lebanese coast. Energy prices have dropped 0.3 per cent, Eurostat figures show. Photograph: Joseph Eid / AFP

 

Euro zone consumer prices grew more slowly in February than in January, as expected, data from the European Union’s statistics office showed on Tuesday, as the spread of the coronavirus around the world depressed oil prices.

Eurostat estimated that consumer prices rose 1.2 per cent year-on-year in February after a 1.4 per cent rise in January, in line with a Reuters poll of analysts.

The slower growth was mainly due to 0.3 per cent year-on-year drop in energy prices. Without it, and excluding the volatile unprocessed food prices, inflation accelerated to 1.4 per cent year-on-year from 1.3 per cent in January.

An even narrower measure that also excludes alcohol and tobacco prices and that is watched closely by many bank economists also accelerated to 1.2 per cent from 1.1 per cent in January.

Separately, Eurostat said that prices at factory gates, which point to trends in consumer prices later, rose 0.4 per cent month-on-month in January for a decline of 0.5 per cent year-on-year, as expected by economists polled by Reuters.

Eurostat also said that euro zone unemployment rate was 7.4 per cent in January 2020 as expected, the same rate as in December 2019 and down from 7.8 per cent in January 2019 - the lowest rate recorded in the euro area since May 2008. – Reuters.