According to Jinshi data reports, despite escalating price pressures from global trade tensions, inflation in the eurozone is below the European Central Bank's target, supporting expectations for an interest rate cut this week. The eurozone CPI fell from 2.2% to 1.9%, below the expected 2.0%, due to declining energy prices and a decrease in service sector inflation.
The EU statistics office reported that the core inflation rate decreased from 2.7% to 2.3%, as the growth in service prices slowed. The market has almost fully priced in Thursday's interest rate cut, as weak wage growth, falling energy prices, a stronger euro, and tepid economic growth all point to a slowdown in inflation.
Some economists expect inflation to remain below the European Central Bank's 2% target until 2026 before rebounding.