Eurozone inflation surges to 2.5% as energy costs reverse eight months of decline
Energy prices swung from -3.1% to +4.9% in a single month, driving eurozone headline inflation above the ECBs target just weeks after it had settled below it.
Eurozone inflation jumped to 2.5% in March, up from 1.9% in February, according to Eurostats flash estimate. The entire acceleration came from a single source: energy.
Energy costs, which had been pulling headline inflation down for months, reversed violently. The annual energy rate swung from -3.1% in February to +4.9% in March -- an eight percentage point reversal in one month, with a 6.8% increase from February to March alone.
Every other component was flat or declining:
| Component | February | March | Change |
|---|---|---|---|
| Energy | -3.1% | +4.9% | +8.0pp |
| Services | 3.4% | 3.2% | -0.2pp |
| Food, alcohol & tobacco | 2.5% | 2.4% | -0.1pp |
| Non-energy industrial goods | 0.7% | 0.5% | -0.2pp |
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