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Spain and Germany may presage steeper than expected inflation fall
March 30, 2017 / 5:16 PM / in 8 months

Spain and Germany may presage steeper than expected inflation fall

LONDON (Reuters) - The European Central Bank has been saying for some time that the current rise in consumer inflation is based primarily on energy and commodities and won’t last.

FILE PHOTO: The headquarters of the European Central Bank (ECB) are illuminated with a giant euro sign at the start of the "Luminale, light and building" event in Frankfurt, Germany, March 12, 2016. REUTERS/Kai Pfaffenbach/File Photo

This has kept most policymakers cautious about changing the bank’s message of continuing with its asset buying until the end of the year and not considering tightening until afterwards.

Data on Thursday suggested the caution was warranted. As this graphic -- -- shows, the rise in prices in Germany and Spain eased off markedly this month.

Could the euro zone be next?

Euro zone inflation for March will be released on Friday. Reuters polls suggest it will dip year-on-year to 1.8 percent from 2 percent.

But the decline in Spain and Germany was much steeper.

Reporting and graphic by Jeremy Gaunt

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