Key inflation gauge in Europe hits record high even as overall price rises slow sharply | CNN Business

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Inflation in Europe has fallen to its slowest pace in more than a year, though stark signs of persistent underlying pressure on prices will complicate policymakers’ next move on borrowing costs

. Prices in the 20 countries that use the euro rose 6.9% this month compared with a year ago, the European Union’s statistics agency said Friday. That’s a sharp decline from 8.5% in February and the lowest inflation rate since February 2022, when Russia launched its full-scale invasion of Ukraine, sending energy prices soaring. The pullback in inflation this month was driven by a 0.9% year-on-year fall in energy prices.

That is likely to create a headache for policymakers at the European Central Bank, who have been hiking borrowing costs aggressively. They have had to balance the need to tame inflation with limiting stress to the economy. The recent turmoil in the banking sector has also underscored the dangers that rapid interest rate rises pose to some lenders and to the wider financial system.

 

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