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Euro zone inflation confirmed at 1.5 percent year-on-year in February

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Euro zone inflation confirmed at 1.5 percent year-on-year in February
An office building in the financial district is photographed from "Main tower" skyscraper early evening in Frankfurt, Germany, October 4, 2018. REUTERS/Kai Pfaffenbach   -   Copyright  KAI PFAFFENBACH(Reuters)
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BRUSSELS (Reuters) – Euro zone inflation edged higher as expected in February, the European Union’s statistics office confirmed on Friday, mainly because of more expensive services, food, alcohol an tobacco.

Eurostat confirmed its earlier estimates that consumer prices in the 19 countries sharing the euro rose 0.3 percent month-on-month for a 1.5 percent year-on-year gain, accelerating from 1.4 percent year-on-year in January.

The European Central Bank wants to keep inflation below, but close to 2 percent over the medium term, but inflation has been well below that target since 2013.

Finnish central bank chief Olli Rehn said the bank needed to review its policy since it failed to boost inflation back to target despite years of extraordinary stimulus.

The ECB has kept record low interest rates and pumped 2.6 trillion euros (2.22 trillion pounds) into the banking system through bond purchases and several rounds of ultra-cheap funding for banks.

Eurostat said price rises of services contributed 0.61 points to the overall year-on-year result in February, while food alcohol and tobacco added another 0.44 points and more expensive energy 0.35 points.

Without the volatile energy and unprocessed food components, or what the ECB calls core inflation and looks at in monetary policy decisions, prices grew 0.3 percent on the month and 1.2 percent in annual terms, the same as in January.

(Reporting By Jan Strupczewski)

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