MNI Eurozone Inflation Insight: Services Y/Y Eases Before ECB

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Executive Summary:

• There was a modest upward surprise in Eurozone headline and core inflation in February’s flash estimate (headline 2.4% Y/Y vs 2.3% consensus; core 2.6% vs 2.5% cons).
• However, the ECB is likely to be encouraged by the moderation in the year-over-year services inflation rate, slowing to 3.7% for its joint slowest pace since June 2022.
• Although the seasonally adjusted services inflation data remains somewhat firm, the more dovish members of the Governing Council are likely to view February’s figures as a positive sign that underlying inflation pressures are easing.