Inflation has slid again in Europe. What that means for interest rates

abcnews.go.com:

Inflation has fallen again in Europe, to 2.4% in March

FRANKFURT, Germany — The inflation that has squeezed European shoppers fell more than expected in March to 2.4%, as cost spikes in the grocery aisle eased and overall price rises headed down in the two biggest economies, Germany and France.

The annual figure for the 20 countries that use the euro currency came in below the 2.5% predicted by financial markets and brings the European Central Bank ever closer to its inflation goal of 2%.

But analysts say the decline from 2.6% in February, though welcome, would likely not be enough to move up the ECB's first interest rate cut.

The bank's rate-setting council meets next week, but the first reduction in borrowing costs is not expected until June despite an economy that's failing to grow, several analysts said.

Food inflation fell to 2.7% from 3.9%, and energy prices dropped by 1.8%, according to numbers released Wednesday by Eurostat, the European Union's statistics agency. Meanwhile, core inflation, which excludes volatile food and energy costs, eased to 2.9% from 3.1% in February.

Annual inflation fell to 2.3% in Germany from 2.7% the month before and to 2.4% in France from 3.2%. The data from Germany — Europe’s largest economy — “brings some relief for the ECB,” said Carsten Brzeski, global head of macro at ING bank.

But prices for services, which include everything from movie tickets to medical care, are still high, and ECB officials will want to see the latest numbers on wage increases, analysts say.

“We think the ECB will commence with rate cuts in June,” said Rory Fennessy, senior economist at Oxford Economics. “While core inflation eased, the stubbornness of services inflation and the desire for the ECB for