Euro-zone inflation slips to 2.2 percent in March

Euro-zone inflation slipped to 2.2 percent in March from 2.3 percent the previous month, according to an EU preliminary estimate published Friday.

Photo: Euro-zone inflation slips to 2.2 percent in March

EU statistical agency Eurostat's calculation did not explain the reasons for the drop in year-on-year inflation in the 12 nations using the euro, keeping its analysis for April 20 when it releases the final figure for the month.

The European Central Bank's guideline for inflation is less than, but close to, 2 percent.

High energy costs have been fueling price rises that led the ECB to raise rates to 2.5 percent earlier this month. It raised rates for the first time in five years last December, from 2 percent to 2.25 percent.

Europeans are feeling more optimistic about the region's slow economic recovery, the EU's economic sentiment indicator showed Friday. The indicator for the entire EU rose to 104.8 points in March compared to last month's 104.1. The euro-zone level also rose by 0.8 percent to 103.5 for March.

"The indicator has been on an upward trend since the summer of 2005," the European Commission said. "In both areas, the indicator is now at its highest level since mid-2001.

Consumer confidence dropped by 1 point in both the EU and euro area but retail, industry and services strengthened.

Spain and Germany reported relatively large improvements in how optimistic people are about the economy but France fell, the commission said.

The EU's business climate indicator for the euro area also rose in March to 0.80 points, the highest level since February 2001.

The better results suggested that the pick-up in industrial production growth has been sustained throughout the first quarter of the year, the commission said. Managers were optimistic about the total orders and export orders they are receiving, it said, reports the AP.

I.L.