GRAPHICS

The Eurozone's Headline Inflation Is Falling, but Core Inflation Continues to Rise

Apr 6, 2023 | 18:48 GMT

A pedestrian shelters from the rain as they walk past fruit and vegetables displayed for sale at a market in east London on March 31, 2023.

A pedestrian shelters from the rain as they walk past fruit and vegetables displayed for sale at a market in east London on March 31, 2023.

(Photo by SUSANNAH IRELAND/AFP via Getty Images)

Eurozone inflation dropped at a record rate to 6.9% in March, down from 8.5% in February, driven by a sharp decline in energy prices. However, core inflation -- which excludes volatile food and energy price components and is thus seen as providing a more stable, long-term view of underlying inflation trends -- continued to rise, reaching a new record high of 5.7% in March from 5.6% in February. In fact, while headline inflation declines on the back of easing energy prices, food prices remain high, thus reducing household spending and keeping pressure on governments across the bloc to continue providing financial support against the ongoing cost-of-living crisis. For instance, in France and Germany, the bloc's two largest economies, upward pressure on food prices accelerated to about 16% and 20%, respectively. Against this backdrop, although underlying inflation is ultimately expected to start declining in the coming months, protests and strikes from...