Euro zone March inflation revised slightly down, still at record

BRUSSELS (Reuters) – Euro zone inflation in March was marginally lower than earlier reported, the EU’s statistics office said on Thursday, but still at record highs because of a surge in the cost of energy.

The European Union’s statistics office Eurostat said consumer prices in the 19 countries sharing the euro rose 2.4% month-on-month in March for a 7.4% year-on-year increase.

An earlier estimate by Eurostat put March inflation at 2.5% in the month and 7.5% from a year earlier.

Eurostat said that out of the year-on-year total, 4.36 percentage points was due to surging energy prices while 1.12 points came from more expensive services and 1.07 points from food, alcohol and tobacco.

The European Central Bank wants to keep inflation at 2.0% over the medium term and has signalled it would be tightening policy by ending its bond purchasing scheme later this year and moving towards a rate rise afterwards.

Energy prices were 44.4% higher than a year earlier in March, Eurostat said, while unprocessed food cost 7.8% more.

But even when these two most volatile components were excluded from inflation measurements, annual inflation was 3.2% in March — well above the ECB’s target.

(Reporting by Jan Strupczewski; editing by Philip Blenkinsop)