Eurozone inflation comes under target

Wed, 10/02/2024

by Ellie LeTu

Source: WSJ

• A sign that inflation is finally slowing down

  • Prices rose 1.8% year over year, which is below the ECB’s target rate of 2%.

  • First time since June 2021 that inflation came in below the ECB’s target.

• Inflation first spiked two years ago

  • Russia’s invasion of Ukraine in early 2022 sent EU prices spiraling higher.

  • Soaring inflation forced the ECB, along with every other major central bank, to raise rates to the highest level this century.

• Central banks worldwide are now bringing rates lower

  • With inflation coming down worldwide, supporting economic growth is of increased importance.

  • Sputtering growth across the EU becomes the ECB’s primary concern.

  • Germany, the EU’s most important economy, is at risk of recession after its economy unexpectedly contracted last quarter.