Eurozone inflation falls sharply to 6.9% as energy costs recede

Authored by ft.com and submitted by Winstonoceaniasmith

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rotetiger on April 2nd, 2023 at 20:24 UTC »

It's not falling. It's just calculated from a new baseline.

Beginning_Beginning on April 2nd, 2023 at 15:48 UTC »

Almost simultaneously it was in the news that Russia, Saudi Arabia and several OPEC countries unexpectedly announced a 1MM barrels/day cut apart from the other 2MM barrels/day cut already agreed upon in October.

The list of countries that collectively announced cuts is really interesting: Besides Saudia Arabia and Russia there's Iraq, UAE, Kuwait, Oman, Algeria, and Kazakhstan.

https://www.reuters.com/business/energy/sarabia-other-opec-producers-announce-voluntary-oil-output-cuts-2023-04-02/

Winstonoceaniasmith on April 2nd, 2023 at 14:31 UTC »

Text in case of paywall:

Eurozone inflation has fallen sharply to its lowest level for a year after a decline in energy costs. Harmonised consumer prices in the euro area rose year-on-year by 6.9 per cent for March, down from 8.5 per cent the previous month, to reach their lowest level since February 2022. The drop, due to a 0.9 per cent fall in energy prices, was steeper than a forecast by economists polled by Reuters, who had expected March eurozone inflation of 7.1 per cent. It will bolster demands for the European Central Bank to stop raising interest rates, already at their highest level since the 2008 financial crisis. The past month’s turmoil in the banking sector has also raised the prospect of a credit crunch that could slam the brakes on both inflation and growth in the coming months. However, ECB officials have signalled they are likely to continue raising rates at their next policy meeting in May unless the banking turmoil worsens. The drop in headline inflation came despite a further acceleration in the rate of price increases for food and services. Core inflation, which excludes energy and food costs to give a better view of underlying price pressures, hit a new eurozone high of 5.7 per cent in March, up from 5.6 per cent the previous month.