(April 16): Eurozone inflation was faster than initially reported in March, suggesting stronger upward pressure on prices from the Iran war.
Last month’s reading was revised up to 2.6% from an initial estimate of 2.5%, Eurostat said on Thursday. The gauges for core and services inflation came in at 2.3% and 3.2%.
March marked this year’s first increase in the inflation rate beyond the European Central Bank’s (ECB) 2% target as the fighting in the Middle East drives energy costs higher. The revision followed similar moves this week by France, Italy and Spain.
While markets expect interest rates to be lifted twice in 2026, policymakers are currently leaning towards no change at their next meeting on April 29-30, according to people familiar with the situation.
“Euro-area inflation edged higher in March, but we don’t think it’s enough to shift the ECB’s stance. The Governing Council will remain focused on the impact of the current energy shock on inflation at its April meeting — we do not expect a move as both the next inflation report and GDP data will be released on the second day its meeting,” says Simona Delle Chiaie, chief euro-area economist at Bloomberg Economics.
See also: ECB officials leaning towards April rate hold
In March, the ECB predicted inflation would average 2.6% in 2026. President Christine Lagarde and several of her ECB colleagues have said the economy is currently somewhere between that baseline and an adverse scenario envisaging price gains peaking at 4.2%.
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