By late February 2023, the euro area was continuing a clear easing trend in inflation for a fourth straight month. A consensus drawn from surveys of economists suggested that the peak in consumer price increases had likely passed, even though definitive February readings had not yet been published. This signaled that shoppers were probably facing fewer rapid price jumps as the region waited for official data to confirm the pace of change across all sectors.
Official February inflation figures for the Eurozone remained unavailable at that moment. Despite the absence of the headline numbers, the core inflation measure — which excludes volatile items such as energy and food costs — held stubbornly at about 5.3 percent. This persistence showed that underlying price pressures remained elevated even as overall inflation slowed, reflecting a broader set of forces shaping pricing for households and businesses alike.
Forecasts at the time pointed to a potential dip in Eurozone core inflation for a fourth consecutive month in February. Analysts highlighted the unusually warm winter as a factor that contributed to lower natural gas prices and, thus, energy-driven components of inflation. While this weather-driven relief appeared to temper a portion of price dynamics, the broader momentum across goods and services suggested that the inflation landscape could still be firm overall.
Looking ahead to the March data release, market participants anticipated inflation would remain well above the European Central Bank’s 2 percent target. The prevailing view among economists was that monetary tightening would persist as policymakers aimed to align expectations with a durable path toward price stability. In this context, the central bank would likely balance the risks of price pressures with the need to support economic activity in the near term.
Some market watchers warned that even if energy costs continued to retreat and helped ease core inflation for a period, the underlying price pressures could keep the ECB in a hawkish stance. With resilient components across goods and services, officials might implement further rate increases into early summer, maintaining a policy stance that keeps households and businesses attentive to evolving cost conditions and borrowing costs.
Around February 21, S&P Global economists reported findings from a study noting a marked improvement in eurozone business activity as winter waned. The expansion in services emerged as the main driver of this rebound, while the manufacturing and industrial sectors also contributed to a broader uptick. The composite index signaled a broad-based recovery in economic activity, underscoring a sense that demand was firm enough to support continued growth across the region.