Inflation across Europe declined to an annualized 2.4% in March, bolstering expectations for interest rate cuts to begin this summer.
Economists polled by the Reuters news agency had expected inflation in the 20-nation Euro zone to remain unchanged at 2.6% for March.
Core inflation that excludes energy, food, alcohol, and tobacco, fell to 2.9% in March from 3.1% in February, also below expectations.
Inflation in Europe’s biggest economy, Germany, came in at a three-year low of 2.2% in March.
Declines in food and gasoline prices were the main reasons for the drop in March inflation, said the European Statistical Office (Eurostat), which released the data.
Markets expect the European Central Bank (ECB) will begin lowering interest rates in June. The central bank’s next monetary policy meeting is scheduled to take place on April 11.
Another key economic indicator that’s just been released, Europe’s unemployment rate, stood at 6.5% in February, unchanged from the previous month of January.
