Inflation in the euro zone is estimated to be higher in March than what was originally forecast, according to a flash estimate of CPI by the EU statistics office, Eurostat today.
Consumer prices in the euro zone were up 2.6 percent in March from a year ago, compared to 2.7 percent in February, higher than the 2.5 percent that was forecast. Inflation is still a sticking point in the euro zone, as higher energy prices are the main driver behind inflation.
The number is above the ECB’s target of “below, but close to 2 percent” inflation, which the ECB judges to be right for price stability and a healthy economy
However today’s numbers will not have a large impact on ECB policy which is focused on the euro zone debt crisis and a need to maintain liquidity support for the banks. It is unlikely that Draghi will attempt to raise the benchmark interest rate.
The ECB kept interest rates at 1 percent this month, judging that low rates were crucial to stimulating growth and that underlying pressures on prices seem limited for the time being.
The euro was little changed after the CPI data, as markets are focused on the Ecofin meeting today, where European finance ministers are expected to make progress on a decision to boost the eurozone bailout fund to one trillion euros by combining the EFSF and ESM.