Eurozone core inflation hits record high

Food, tobacco and alcoholic drinks were 15.4% more expensive in March than a year earlier

The Eurozone’s core inflation accelerated in March to a new all-time high of 5.7% from 5.6% recorded last month, preliminary figures from EU’s statistical agency Eurostat showed on Friday.

The reading excludes food, tobacco and alcoholic drinks in the countries that share the euro currency, which were 15.4% more expensive in March than this time last year. They were also higher compared with a 15% annual rise in February.

Meanwhile, headline inflation came in at 6.9% last month versus 8.5% in February. The decline is attributed to the drop in annual energy inflation from 13.7% to 0.9%.

Analysts expect the European Central Bank (ECB) to continue its rate-hiking cycle, started last July in an effort to tame inflation. In March, the ECB raised the key interest rate by 50 basis points, bringing the benchmark to 3%.

READ MORE: Eurozone can’t recover wealth lost to energy crisis – Lagarde

“Policymakers at the ECB won’t read too much into the drop in headline inflation in March and will be more concerned that the core rate hit a new record high,” Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics, said, as cited by CNBC.

The expert added that the ECB is likely to keep raising rates despite the drop in the headline figure.

Find more stories on economy and finance in TROIB business