Euro area CPI edges past forecasts in February

The cost of living in the euro area picked up a tad more quickly than previously estimated last month, revised data showed.

According to Eurostat, in seasonally adjusted terms, the annual rate of increase in the euro area's Consumer Price Index picked up from 5.1% for January to 5.9% in February.

That was higher than a preliminary estimate of 5.8%.

However, the year-on-year rate of increase in core inflation, which excludes both energy and food prices, was unrevised at 2.7%.

Commenting on the outlook for euro area headline CPI, Capital Economics's Jack Allen-Reynolds, predicted that it would remain above 4.0% until the end of 2022 and would only decline to 2.0% by the end of 2023, "at the earliest".

To back up his point, he said that energy prices would not fall "significantly" until the back half of 2022, even as food prices were set to rise further still, amid broad-based gains in core inflation.