EUROPEAN INFLATION: EZ Services Inflation Revised Marginally Higher In March

Eurozone HICP inflation was unrevised at a rounded 2.2% Y/Y in the final March release along with core inflation at 2.4% Y/Y. The lack of revisions masked marginally less favourable undercurrents, mainly with services from the ECB's perspective although this upward revision was exaggerated by rounding. The release shouldn't have a material impact on tomorrow's ECB decision. 

• Within the details, headline was unrevised to 2.d.p at 2.18% Y/Y after 2.32% in Feb.
• Core (ex energy, food, alcohol and tobacco) was revised up slightly 2.41% to 2.43% Y/Y after 2.57% in Feb.
• Services inflation was revised up from 3.42% to 3.45% Y/Y, rounding up to 3.5%. That’s still a moderation from the 3.68% Y/Y in February but it no longer sees a rounded 3.4% that had last been lower in Apr 2022 and just about leaves a 3.5% reading that was in line with original analyst estimates.
• Recall that seasonally adjusted momentum accelerated in flash March data to 3.2% annualized (having bottomed at 2.5% in Jan) as it somewhat looks to repeat last year’s pattern amidst residual seasonality concerns. We’ll update latest trends here when the ECB updates its seasonal data later today.
• Some volatile items saw larger revisions but they were partly offsetting:
  • Unprocessed food inflation was revised up from 4.11% to 4.19% Y/Y, still its strongest since Jan 2024.
  • Energy inflation was revised down from -0.74% to -0.98% Y/Y.  This doesn’t materially alter its trend though, still the lowest since November after three positive Y/Y readings through Dec-Feb.