Eurozone inflation eases as expected in February

Annual inflation in the eurozone eased in February but core inflation continued to rise, according to data released on Friday by Eurostat.

Inflation nudged down to 8.5% from 8.6% in January, in line with the initial estimate and consensus expectations.

Energy inflation eased to 13.7% in February from 18.9% the month before, while food, alcohol and tobacco inflation ticked up to 15% from 14.1%.

Meanwhile, core inflation rose 0.3 percentage points to 5.6%, also in line with the initial estimate and consensus expectations.

Oxford Economics said: "Today's print lends support to yesterday's decision of the ECB to continue tightening monetary policy despite the ongoing turbulence in financial markets.

"Although we do not think that the council will fully sidestep the issue of the impact of higher rates on financial stability, it is more likely to use liquidity measures to address this risk. Hence, we see little chance of a meaningful pivot before there are clear signs of core inflation abating."

Separate data from Eurostat showed that hourly labour costs in the eurozone rose by 5.7% year-over-year in the fourth quarter, up from a revised 3.7% increase in the third quarter.