Eurozone inflation remained stable in February as coronavirus restrictions weighed on the region’s economy ahead of an expected spike in consumer prices in the coming months.
Prices in the 19 countries sharing the euro rose 0.9 per cent compared to a year earlier, stable compared to January, according to a flash estimate from Eurostat, the European Union's statistics office.
January's 0.9 per cent rate marked a big leap after several months of negative inflation due to falling consumer demand caused by the Covid-19 crisis and the restrictions put in place across Europe to address it.
Sam Miley from Oxford Economics said there is scope for eurozone inflation to increase further in the coming months, with pressure coming from energy prices which fell considerably in 2020.
“As such, any annual comparisons will be subject to an extremely low comparative base. Despite the impact on households’ bottom line, the potential upward trend in headline inflation is unlikely to move policymakers at the European Central Bank, who are more focused on the core inflation measure,” Mr Miley said.
Food prices saw the fastest year-on-year growth in February of 1.4 per cent, while energy prices were down just 1.7 per cent, following annual contractions of 8.3 per cent, 6.9 per cent and 4.2 per cent in November, December and January, respectively.
“This smaller contraction means that energy prices provided less of a drag on inflation, putting some upward pressure on the change in the inflation rate,” said Mr Miley
Last week, Bank of England chief economist Andy Haldane warned central bankers around the world to keep an eye on prices as he compared inflation to a "tiger" that has been woken up and could prove difficult to tame.
He said a post-lockdown surge in demand could put pressure on coronavirus-hit economies and said central banks should be cautious about “acting too conservatively by tightening policy prematurely”.
“The greater risk at present is of central bank complacency allowing the inflationary [big] cat out of the bag,” he said.
While the ECB will generally welcome the return of faster inflation, it has also pledged to ignore short-term spikes this year as it continues to support the economy with a wave of liquidity.
In January, ECB president Christine Lagarde held the pandemic bond-buying programme at €1.85 trillion ($2.26tn), following a €500bn boost in December, and reiterated that it will run until March 2022 at the earliest.
Jack Allen-Reynolds, senior Europe economist at Capital Economics, expects the eurozone's headline inflation rate to exceed 2 per cent in the second half of the year.
But rather than be concerned about this and respond by paring back its stimulus measures, Mr Allen-Reynolds expects the ECB “to look through this, as inflation is likely to fall next year”.
“Supply problems should be resolved, holiday and clothing prices should have largely recovered to pre-crisis levels, and energy inflation will fall,” he said.
“Meanwhile, the hit from the pandemic to employment, incomes and confidence should mean that aggregate demand remains weak. So the ECB will keep policy loose to support the recovery.
UAE currency: the story behind the money in your pockets
Your Guide to the Home
- Level 1 has a valet service if you choose not to park in the basement level. This level houses all the kitchenware, including covetable brand French Bull, along with a wide array of outdoor furnishings, lamps and lighting solutions, textiles like curtains, towels, cushions and bedding, and plenty of other home accessories.
- Level 2 features curated inspiration zones and solutions for bedrooms, living rooms and dining spaces. This is also where you’d go to customise your sofas and beds, and pick and choose from more than a dozen mattress options.
- Level 3 features The Home’s “man cave” set-up and a display of industrial and rustic furnishings. This level also has a mother’s room, a play area for children with staff to watch over the kids, furniture for nurseries and children’s rooms, and the store’s design studio.
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UAE currency: the story behind the money in your pockets
Results
1. Lewis Hamilton (Mercedes) 1hr 32mins 03.897sec
2. Max Verstappen (Red Bull-Honda) at 0.745s
3. Valtteri Bottas (Mercedes) 37.383s
4. Lando Norris (McLaren) 46.466s
5.Sergio Perez (Red Bull-Honda) 52.047s
6. Charles Leclerc (Ferrari) 59.090s
7. Daniel Ricciardo (McLaren) 1:06.004
8. Carlos Sainz Jr (Ferrari) 1:07.100
9. Yuki Tsunoda (AlphaTauri-Honda) 1:25.692
10. Lance Stroll (Aston Martin-Mercedes) 1:26.713,
Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
Brief scoreline:
Burnley 3
Barnes 63', 70', Berg Gudmundsson 75'
Southampton 3
Man of the match
Ashley Barnes (Burnley)
Prop idols
Girls full-contact rugby may be in its infancy in the Middle East, but there are already a number of role models for players to look up to.
Sophie Shams (Dubai Exiles mini, England sevens international)
An Emirati student who is blazing a trail in rugby. She first learnt the game at Dubai Exiles and captained her JESS Primary school team. After going to study geophysics at university in the UK, she scored a sensational try in a cup final at Twickenham. She has played for England sevens, and is now contracted to top Premiership club Saracens.
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Seren Gough-Walters (Sharjah Wanderers mini, Wales rugby league international)
Few players anywhere will have taken a more circuitous route to playing rugby on Sky Sports. Gough-Walters was born in Al Wasl Hospital in Dubai, raised in Sharjah, did not take up rugby seriously till she was 15, has a master’s in global governance and ethics, and once worked as an immigration officer at the British Embassy in Abu Dhabi. In the summer of 2021 she played for Wales against England in rugby league, in a match that was broadcast live on TV.
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Erin King (Dubai Hurricanes mini, Ireland sevens international)
Aged five, Australia-born King went to Dubai Hurricanes training at The Sevens with her brothers. She immediately struck up a deep affection for rugby. She returned to the city at the end of last year to play at the Dubai Rugby Sevens in the colours of Ireland in the Women’s World Series tournament on Pitch 1.
