PARIS (AFP) – French and Spanish annual inflation slowed in February, official data showed yesterday, fuel speculation over the European Central Bank’s (ECB) next interest rate move.
Consumer prices rose 2.9 per cent in France compared to the same month last year after reaching 3.1 per cent in January, according to the INSEE statistics institute.
The annual fall was due to a slowdown in prices of food, manufactured products and services while energy prices accelerated.
But inflation jumped by 0.8 per cent between January and February after a 0.2-per-cent monthly fall, INSEE said.
The monthly increase was due to rising prices of services, including rents and transport, as well as energy, manufactured products and tobacco.
In Spain, annual inflation cooled to 2.8 per cent in February as electricity prices fell. It had reached 3.4 per cent the previous month.
The data will fuel speculation over the ECB’s next move when it holds its monetary policy meeting on March 7.
Markets hope the central bank will soon begin cutting rates that were raised to combat inflation.
Although the Frankfurt-based ECB has held rates steady so far in 2024, it is widely expected to begin cutting rates later this year in the face of slowing consumer prices and a weakening eurozone economy.
Separate data showed the French economy performed better than previously estimated in the last three months of 2023, growing 0.1 per cent instead of stagnating. But INSEE confirmed its growth estimate for the full year at 0.9 per cent.
