Inflation in the eurozone probably rose this month from a four month low in January, Eurostat said today. In its flash estimate on consumer prices, the statistics office said inflation rose to 2.3pc in February from 2.2pc, staying above the European Central Bank's (ECB) target of 2.0pc. Inflation in the eurozone has come in above the ECB's 2.0pc upper limit every month since July 2002. Inflation was up 1.9pc year-on-year in June. Despite remaining above target, the ECB slashed interest rates by 50 basis points to 2.75pc in December and is expected to cut rates again at its meeting next week amid growing concern over the strength of the recovery in the 12 nations that share the euro.
Analysts at Morgan Stanley said earlier this week that they expect the bank's policymakers to cut rates by as much as 1.0pc by the end of the second quarter. With the governing council due to meet in Rome in April, and analysts noting that meetings away from Frankfurt are normally more ceremonial affairs than "working" meetings, the bank is tipped to cut rates in March and again in May or June. //www.fxcentre.com/br