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Euro Zone April Inflation Slowdown Confirmed

Published 05/16/2018, 05:00 AM
Updated 05/16/2018, 05:00 AM
© Reuters.  Euro zone April inflation slowdown confirmed

© Reuters. Euro zone April inflation slowdown confirmed

Investing.com - Inflation in the euro zone slowed in April, according to revised figures from the bloc’s statistics agency Eurostat on Wednesday.

Eurostat confirmed its preliminary flash estimate that its consumer price index slowed to 1.2% year-on-year in April, down from 1.3% in March.

Core, or underlying inflation, which strips out volatile items such as energy and food, fell to an annual rate of 0.7%, also in line with the preliminary estimate, but down from 1.0% in the previous month.

The ECB targets inflation of close to but just under 2%.

On a monthly basis, the CPI for April came in at 0.3%, after an increase of 1.0% in the previous month, while the core CPI slowed to 0.2% from 1.4% in March.

Muted inflation highlights the challenges faced by the European Central Bank as it debates winding down stimulus measures.

Speaking after the bank’s latest policy meeting in April, ECB President Mario Draghi acknowledged that the pace of the euro area recovery had moderated since the start of the year, but signaled no change in monetary policy.

Draghi said his overall assessment was one of “caution tempered by an unchanged confidence” that inflation is moving towards the ECB’s target of just below 2%.

Many analysts now believe that the ECB may wait until July - a month later than previously expected - to give markets updated forward guidance on its plans to begin scaling back stimulus.

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