Inflation in the 15 countries that use the euro slowed more than expected in April, according to the first estimate from the European Union statistics office Eurostat. It is the first month that inflation has not gone up since August, but the EU cautioned this “flash” estimate could be revised higher later in these “uncertain times.”
Consumer prices rose 3.6% year-on-year in April, matching February’s figure and down from a record high 3.6% in March.
Speaking earlier this week, EU Economic and Monetary Affairs Commissioner Joaquin Almunia said: “These inflationary risks will have extremely high social consequences, both within the EU and the euro area, and it is the poorest and the weakest sectors of our societies that are suffering most.”
Soaring oil and food prices are driving inflation higher, though the cost of crude has declined signficantly this week, helped by the fact that the dollar has strengthened in the belief that the Fed is about to pause in its rate-cutting campaign.
The European Central bank will take heart from the latest inflation data seeing it as vindication for the policy of leaving euro zone interest rates unchanged. In an interview with Austrian newspapers, ECB Chairman Jean-Claude Trichet said: “We believe that our current monetary policy stance will contribute to delivering price stability.”