Eurozone inflation revised up to 0.0% in March

Eurozone inflation surprised on the upside in March, with the final consumer prices index (CPI) reading revised higher to 0.0% for the month after falling in February.

With a monthly rate of 1.2%, according to Eurostat, the statistical office of the European Union, the flat annual rate of CPI in March was better than another month at -0.1% that the market was forecasting and the revised -0.2% from February.

The initial reading of euro area CPI had been of -0.1%.

Eurozone core CPI, which excludes more volatile prices such as fuel and food, remained at 1.0% for March, as expected.

Eurostat said the largest upward impacts to euro area inflation came from restaurants & cafés, package holidays and property rents, while the main drags were from various fuels.

Across the wider European Union annual inflation also improved to 0.0% from -0.2% in February 2016, but short of the 0.3% in January.

Last week, the European Central Bank's rate-setters flagged to markets their willingness to keep adding to stimulus if that was necessary to meets its target for price stability.

Speaking at the presentation of the European Central Bank’s annual report, vice-president Vitor Constancio said: “the ECB has done and, within its mandate, will continue to do whatever is needed to pursue its price stability objective which now implies also trying to foster growth".

ECB chief economist Peter Praet presented the ECB's estimates of the effectiveness of its policies, which he said would add over 0.50 percentage points to Eurozone inflation in 2016, without taking into account the policy-easing measures unveiled in March.