Eurozone inflation eases back on lower energy costs

 Inflation across the 19-country eurozone slipped back in February largely as a result of lower energy prices, official figures showed Tuesday.

Statistics agency Eurostat said consumer prices were 1.2% higher in the year to February, down from the 1.4% rate in the previous month. The decline was in line with market expectations.

Energy prices weighed on inflation, falling by 0.3% over the year. Oil prices, in particular, have been hit hard by mounting concerns over the economic impact of the coronavirus outbreak, with traders fretting over the hit to global demand. Energy prices have fallen further since Eurostat compiled the February inflation data.

Stripping out volatile items, including energy but also food, alcohol and tobacco, the so-called core rate of inflation actually edged up in the month to 1.2% from 1.1%.

Both rates remain below the European Central Bank's goal of just below 2%.

However, any forthcoming action by the central bank to stimulate the eurozone economy and get inflation back towards target is less likely to be based on current inflation figures than on the virus' economic impact.

“With the coronavirus disruption further denting our already subdued expectations for eurozone economic prospects, price pressures are expected to remain suppressed over the coming quarters,” said Luka Raznatovic, eurozone economist at Oxford Economics.

Elsewhere, Eurostat found that unemployment across the bloc held steady at 7.4%.