Eurozone inflation accelerated sharply in March, with headline CPI rising from 1.9% yoy to 2.5% yoy, matching expectations and marking the highest level since January 2025. The jump was driven primarily by a reversal in energy prices, which surged from -3.1% yoy to 4.9% yoy, reflecting the impact of rising oil costs linked to ongoing Iran War.
However, underlying inflation showed signs of moderation. Core CPI, which excludes energy, food, alcohol, and tobacco, edged down from 2.4% yoy to 2.3% yoy, below expectation of 2.4% yoy. This suggests that while headline inflation is being pushed higher by external factors, broader price pressures within the economy are not accelerating at the same pace.
Across components, services inflation eased slightly from 3.4% yoy to 3.2% yoy. Food, alcohol and tobacco slowed from 2.5% yoy to 2.4% yoy. Non-energy industrial goods declined from 0.7% yoy to 0.5% yoy.
