According to Jin Shi Data reports, despite the intensifying price pressures from global trade tensions, inflation in the Eurozone is below the European Central Bank's target, supporting expectations for a rate cut this week. The Eurozone CPI fell from 2.2% to 1.9%, lower than the expected 2.0%, due to falling energy prices and declining inflation in the service sector.
The European Union statistics office stated that the core inflation rate dropped from 2.7% to 2.3%, as growth in service prices slowed. The market has almost fully priced in Thursday's rate cut, as factors such as weak wage growth, falling energy prices, a strengthening euro, and lukewarm economic growth point to a slowdown in inflation.
Some economists expect inflation to remain below the European Central Bank's 2% target until 2026 before rebounding.