Euro zone inflation slows to 1.4% in March

Inflation in the euro zone slowed in March, data showed today, amid worries that the European economy is cooling.

The slowdown of inflation comes as signs are multiplying of slower economic growth, especially in powerhouse Germany and the bloc’s second-biggest economy, France.

The rise in consumer prices was less than analyst expectations and dipped away from the European Central Bank’s target of close to, but just below 2%.

Closely tracked core inflation, which strips out volatile energy prices, dropped to 0.8%, in a sign that demand was stalling in Europe.

Last week indications of a weak first quarter for the euro zone mounted as a closely-watched survey pointed to March output being dragged further down by manufacturing weakness.

Manufacturers in the 19-nation single currency bloc “reported their steepest downturn for six years” as pressure mounted from trade wars and Brexit fears, data company IHS Markit said.

This as the ECB added to growth worries when its chief Mario Draghi hinted that interest rates would stay low for longer than previously anticipated, to stimulate growth and inflation.

The unemployment rate in the euro zone remained stable at 7.8% in February, its lowest level since October 2008, the EU’s Eurostat said.

Unemployment in the euro zone has fallen steadily since September 2016, when it dropped below the symbolic threshold of 10%.

It is now near the average rate heading into the 2007-2008 financial crisis, when it stood at 7.5%.

Among the 19 countries that have adopted the single currency, the lowest unemployment rate in February was recorded in Germany at 3.1% and the Netherlands 3.4%.

The highest rates were recorded in Greece at 18% in December 2018, the latest data available, and Spain at 13.9%.

Across the 28 countries of the European Union, the unemployment rate stood at 6.5% in February.

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