Eurozone inflation eases less than expected in February

Eurozone inflation eased less than expected in February, according to preliminary data released by Eurostat on Thursday.

Headline inflation in the bloc ticked down to 8.5% year-over-year in February from 8.6% in January. This was above consensus expectations for a decline to 8.2%.

Food, alcohol & tobacco inflation rose to 15% from 14.1%, while energy inflation declined to 13.7% from 18.9%.

Meanwhile, the core rate of inflation - which excludes energy, food, alcohol and tobacco - rose to a record 5.6% in February from 5.3% the month before, coming in above expectations for it to be unchanged.

Separate figures from Eurostat showed that headline eurozone unemployment was unchanged at an upwardly-revised 6.7% in January, in line with consensus expectations.

Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics, said: "February’s increase in core inflation will reinforce ECB policymakers’ conviction that significant rate increases are needed.

"For some time we have been forecasting a 50 basis points hike at the meeting in two weeks’ time and another in May, but further hikes at later meetings now look increasingly likely."