The last mile

After a record series of interest rate hikes from the European Central Bank, Europe’s inflation rate is way down from its peak.

High rates are not just combating inflation by making borrowing more expensive, but also dampening economic growth. So, is it time for a rate cut? Probably not yet.

The consumer price index for the 20 countries that use the euro currency is taking its sweet time to cover the last mile before it reaches 2%, the goal set by the ECB.

February’s figure came in at 2.6%, down from the peak of 10.6% in late 2022. Inflation, however, is still higher than it was in November, when it came in at 2.4%.

And inflation for services — a wide range of activity including things as varied as concert tickets, office cleaning, medical care and hotel bills — remained stubbornly elevated at 3.9%.

Core inflation, which excludes volatile energy and food prices, also declined but remained above 3%.

The upshot: The ECB is unlikely to cut its key rate benchmark from a record-high 4% at its Thursday policy meeting. Analysts predict April at the earliest, more likely June.