FRANKFURT, March 17 (Reuters) - Euro zone inflation
eased a touch in February but underlying price growth continued
to accelerate on a surge in services costs, the EU's statistics
agency Eurostat said on Friday, confirming preliminary data
released earlier this month.
Consumer price inflation in the 20 countries sharing the
euro currency eased to 8.5% in February from 8.6% a month
earlier as a big fall in energy costs was offset by a price
surge in nearly all other areas.
Underlying price growth meanwhile continued to accelerate
and inflation excluding volatile food and fuel prices, an
indicator closely watched by the European Central Bank, jumped
to 5.6% from 5.3%.
The ECB raised interest rates by another 50 basis points on
Thursday to fight off a historic surge in prices and its new
projections showed that underlying price growth will be stubborn
for years to come, staying above its 2% target through 2025.
This is likely to worry policymakers because underlying
price growth, often fuelled by rising wages, tends to prolong
overall inflation, making it even more difficult to tame.
While the ECB omitted a usual inflation risk assessment from
its policy statement on Thursday, some policymakers have already
said that risks were skewed towards higher outcomes because core
inflation is proving to be sticky.
Indeed, the contribution of services to overall inflation
doubled in a year, a worry since the sector is the most
sensitive to wage growth.
Overall inflation is likely to keep easing in the coming
months, mostly on lower energy prices, but underlying price
growth could continue to tick up and its decline is also likely
to be protracted, policymakers and analysts say.
(Reporting by Balazs Koranyi;
Editing by Andrew Cawthorne)
Reuters Messaging:
balazs.koranyi.thomsonreuters.com@reuters.net))
