European Inflation Near 10-Year Low

Consumer prices in the euro area rose 1.2 percent from a year earlier in February, compared with 1.1 percent in January, which was the lowest rate in a decade.

EU annual inflation was 1.7% in February 2009, down from 1.8% in January. A year earlier the rate was 3.5%. Monthly inflation was 0.4% in February 2009.

In February 2009, the lowest annual rates were observed in Ireland and Portugal (both 0.1%) and Cyprus (0.6%), and the highest in Latvia (9.4%), Lithuania (8.5%) and Romania (6.9%). Compared with January 2009, annual inflation fell in eleven Member States, remained stable in two and rose in thirteen.

The main components with the highest annual rates in February 2009 were alcohol & tobacco (3.2%), hotels & restaurants (2.9%) and housing (2.8%), while the lowest annual rates were observed for transport (-2.7%), communications (-1.4%) and clothing (0.1%). Concerning the detailed sub-indices, gas (+0.21 percentage points), restaurants & cafés (+0.15) and electricity (+0.12) had the largest upward impacts on the headline rate, while fuels for transport (-0.78) and heating oil (-0.25) had the biggest downward impacts.

The main components with the highest monthly rates were clothing (1.5%), recreation & culture (1.1%) and transport (0.6%), while the lowest were food (-0.1%), housing and communications (0.0% each). In particular,  package holidays (+0.08 percentage points), fuels for transport (+0.07) and garments (+0.06) had the largest upward impacts, while cars (-0.04) had the biggest downward impact.

European Inflation Near 10-Year Low, Eurostat
3/16/2009 6:09:21 AM