On April 23, 2024, people were seen strolling the streets of Montmartre in Paris, France. The euro area saw a steady rise in prices, with inflation holding at 2.4% in April as the economy recorded growth in the first quarter, according to flash figures released on Tuesday.
Headline inflation matched economists’ expectations at 2.4%, with a monthly inflation rate of 0.6%. Core inflation, which excludes energy, food, alcohol, and tobacco, decreased to 2.7% from 2.9% in March. The impact of lower energy prices on a year-on-year basis continued to moderate, with a rate of -0.6% compared to -1.8% in March.
In the first three months of the year, gross domestic product (GDP) in the euro area increased by 0.3%, slightly exceeding economist forecasts. However, the GDP for the fourth quarter of 2023 was revised from no growth to a 0.1% contraction, indicating that the euro zone was in a technical recession in the second half of the previous year.
Market expectations are growing for the European Central Bank (ECB) to reduce interest rates at its next monetary policy meeting on June 6. Money market pricing currently suggests a nearly 70% chance of a rate cut in June, with even higher expectations for cuts in July or September
