THE eurozone annual inflation rate fell to 8.5% last month, the EU’s statistics agency said today, but the drop was less than expected as food costs soar.

Inflation was down last month from 8.6% in January but analysts at financial data firm FactSet had forecast a steeper fall to 8.2%, while the Bloomberg consensus was 8.3%.

Annual inflation has slowed down since it hit a peak of 10.6% in October last year, but it remains much higher than the European Central Bank’s (ECB) target of 2%.

A continued decline in the rate of energy costs had pushed consumer prices lower but in February the rise in food and drink costs outpaced that of energy.

Food and drink prices rose by 15% last month compared with 14.1% in January, Eurostat said.

Energy cost rises fell to 13.7%, compared with 18.9% in January.

Among the 20 countries that use the euro, Luxembourg had the lowest inflation rate, reaching 4.8% last month, Eurostat said.

Belgium was second lowest with consumer prices hitting 5.5% last month.

ECB chief Christine Lagarde last month said the institution plans to raise its interest rates by a half percentage point at the next meeting in March.

According to Eurostat data published today, the unemployment rate in the eurozone remained stable in January at 6.7%. – AFP, March 2, 2023.