Eurozone deflation eases more than expected

Eurozone consumer prices fell 0.3% in February, beating analysts' estimates for a 0.5% decline, and recovering from the previous month's 0.6% drop.

Eurostat's preliminary estimate on inflation was supported by an increase in services, food, alcohol and tobacco. Energy prices continued to weigh on inflation, but recovered slightly from January's slump.

The European Central Bank (ECB) on Thursday launches its €1trn quantitative easing programme to help bring inflation back towards its target of just under 2%.

"February’s continued fall in Eurozone consumer prices and the still high rate of unemployment in January confirm that the ECB faces an uphill battle against the threat of deflation," according to Jennifer McKeown, senior European economist at Capital Economics.