People walking in the streets of Montmartre, Paris, France, on April 23, 2024.Â
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Price rises in the euro area held steady at 2.4% in April, while the economy returned to growth in the first quarter, according to flash figures published Tuesday.
Headline inflation of 2.4% was in line with the forecast of economists polled by Reuters. On a monthly basis, inflation was 0.6%.
Core inflation, excluding energy, food, alcohol and tobacco, dipped to 2.7% from 2.9% in March. The impact of a lower year-on-year price of energy continued to moderate, coming in at -0.6% versus -1.8% in March.
Gross domestic product meanwhile rose by 0.3% over the first three months of the year, slightly better than consensus economist expectations. GDP for the fourth quarter of 2023 was revised from no growth to a 0.1% contraction, which means that the euro zone was in a technical recession in the second half of last year.
Market expectation is mounting for the European Central Bank to start cutting interest rates at its next monetary policy meeting on June 6. Money market pricing currently indicates a nearly 70% probability of a June trim, according to LSEG data, with even higher bets on a cut in July or September.
A host of voting ECB members told CNBC earlier this month that they are anticipating an interest rate reduction in June, citing the need to prevent an excessive slowdown in the euro zone economy. They also flagged risks from oil prices and volatility in the Middle East.
Analysts at BNP Paribas had expected the headline rate to remain constant, largely due to higher crude oil prices, and that this outcome would continue to support a June cut. After June, the outlook for rates is more uncertain, they said in a note ahead of publication of the latest inflation numbers.