Expectations of eurozone rate cuts rise as inflation hits 2.4% in April

Annual inflation in the eurozone stood at 2.4% in April, unchanged since March and reinforcing expectations of a rate cut for the bloc before the end of the summer. The figures were in line with expectations.

Core inflation, a figure that excludes volatile indicators, was 2.7 percent in April.

According to the latest figure, inflation last year was 7 percent, according to Eurostat, the statistical office of the European Union.

The biggest price increases came from services, food and tobacco products, while pressure on the energy market eased as tensions in the Middle East continued to simmer.

The lowest annual rates were recorded in Lithuania (0.4%), Denmark (0.5%) and Finland (0.6%). The highest annual rates were recorded in Romania (6.2%), Belgium (4.9%) and Croatia (4.7%). Compared with March 2024, annual inflation fell in fifteen Member States, remained stable in four and rose in eight, the data showed.

Eurozone estimates this week suggest that inflation will fall faster this year than previously expected, as the shock from the Red Sea conflict has hit the region less hard than previously thought.

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The European Commission said annual inflation would fall to 2.5 percent this year before reaching the European Central Bank's two percent target in the second half of 2025.

“We believe we have turned the corner,” said EU Economic Commissioner Paolo Gentiloni. “We expect growth to pick up this year and accelerate further in 2025. At the same time, inflation should continue to fall and reach the ECB target next year.”

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