Eurozone inflation falls less than expected

The eurozone annual inflation rate fell to 8.5 per cent in February, the EU’s statistics agency said Thursday, but the drop was less than expected as food costs soar.

Inflation was down last month from 8.6 per cent in January but analysts at financial data firm FactSet had forecast a steeper fall to 8.2 per cent, while the Bloomberg consensus was 8.3 per cent.

Annual inflation has slowed down since it hit a peak of 10.6 per cent in October last year, but it remains much higher than the European Central Bank’s (ECB) target of two per cent.

A continued decline in the rate of energy costs had pushed consumer prices lower but in February the rise in food and drink costs outpaced that of energy.