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Eurozone inflation fell to 2.2% last month, according to the latest data from Eurostat on Wednesday, down from 2.3% in February.
A year earlier, the rate was 2.4%. European Union annual inflation was 2.5% in March 2025, down from 2.7% in February. A year earlier, the rate was 2.6%.
The lowest annual rates were registered in France (0.9%), Denmark (1.4%) and Luxembourg (1.5%), while the highest annual rates were recorded in Romania (5.1%), Hungary (4.8%) and Poland (4.4%).
Compared with February last year, annual inflation fell in sixteen member states, remained stable in one and rose in 10.
The highest contribution to the annual euro area inflation rate came from services, up 1.56 percentage points (pp), followed by food, alcohol & tobacco (+0.57pp), non-energy industrial goods (+0.16pp) and energy (-0.10pp).
Although Romania recorded the EU's highest annual inflation rate in March, at 5.1%, Slovenia registered the lowest annual inflation among Southeast European (SEE) EU member states last month, at 2.2%, against an EU average of 2.5%.
In monthly terms, Greece recorded the biggest rise in consumer prices in the bloc at 1.9%. On the other hand, Bulgaria and Romania both marked the lowest monthly inflation in the SEE region, at 0.3%, while consumer prices in the EU overall went up 0.5% from February.
Read more: UK inflation falls to 2.6% in March as price of petrol drops
It comes as the European Central Bank (ECB) is set to cut interest rates on Thursday to help cushion the eurozone economy against US president Donald Trump’s barrage of tariff hikes.
Money markets indicate there is a 98% chance that Europe's central bank will reduce borrowing costs again to 2.25% as the European economy prepares for a possible hit.
Hugh Lind, economist at Cebr, said: “Further falls in inflation will encourage the European Central Bank to press ahead with rate cuts amidst elevated uncertainty and the recent implementation of tariffs by the US.
"Headline inflation was confirmed at 2.2% in March, down from February’s reading of 2.3%. Core and services inflation, measures which more accurately reflect domestic price pressure, also dropped in March. Indeed, the tariff policy of the US is likely to placed downward pressure on both growth and inflation in the Eurozone, as demand for European exports falls and Chinese goods are rerouted away from the US.
"We, therefore, anticipate a 25-basis point cut in the policy rate at tomorrow’s ECB meeting and two further cuts by the end of the year.”
Meanwhile, financial markets are also betting on an interest rate cut from the Bank of England at its May meeting, estimating an 86% probability after Wednesday's UK inflation data.