Eurozone inflation came in cooler than expected with prices rising 2.3% in the year to February, less than the 2.4% initially estimated.
Inflation was down from the 2.5% reported in January, according to updated figures from Eurostat on Wednesday, which looked at inflation across the 20 nations that use the euro.
The lowest annual rates were registered in France (0.9%), Ireland (1.4%) and Finland (1.5%) with the highest recorded in Hungary (5.7%), Romania (5.2%) and Estonia (5.1%).
Compared with January 2025, annual inflation fell in fourteen member states, remained stable in six and rose in seven.
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Services inflation dipped to 3.7% per year in February, while energy prices were just 0.2% higher than a year earlier, good prices were 0.6% higher, and food, alcohol and tobacco prices were up 2.7%.
Wednesday’s revision also follows an unexpected drop in Germany’s inflation rate.
The data strengthens the argument for the European Central Bank (ECB) to keep cutting interest rates as policymakers mull how much further to ease. It has already reduced interest rates six times since last summer.
Economists surveyed by Bloomberg still predict two more rate cuts in April and June before the deposit rate settles at 2%. However markets are torn on what will happen next month, although leaning toward two moves in total before year-end.
The ECB announced a quarter-point interest rate cut to 2.5% in March.
Earlier this week, ECB president Christine Lagarde warned of “exceptionally high” uncertainty as Europe retaliated against US president Donald Trump’s tariffs.
She said it was “impossible” to guarantee that policymakers would meet a 2% inflation target in the short-term given global volatility.
“If we were to go to a real trade war where trade would be dampened significantly, that would have severe consequences,” she said. “For growth around the world and for prices around the world, but particularly in the United States.
“The initiator, the retaliator, the re-retaliator, and so on and so forth — all of that is going to hurt growth at large. Everyone will suffer, this is a constant in history of trade.
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