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Euro zone inflation slowdown in February confirmed, core revised down

FILE PHOTO: Meat products are displayed in an EDEKA supermarket in Berlin

BRUSSELS (Reuters) - Euro zone headline inflation slowed in February year-on-year, the EU statistics office said on Wednesday confirming its earlier estimates, while it revised down a measure of core inflation which excludes the volatile energy and food prices.

Eurostat said prices in the 19-nation single currency bloc rose 1.2% in February compared to one year earlier, a slowdown from 1.4% in January.

The February reading was in line with market expectations and with estimates released by Eurostat at the beginning of March.

But the statistics agency revised down its earlier estimate of core inflation that excludes volatile energy and unprocessed food prices to 1.3% from 1.4%.

The revised reading shows this indicator remained unchanged from January when it also rose 1.3% year-on-year. It is the measure most closely watched by the European Central Bank in deciding its monetary policy.

The ECB has struggled for years to meet its close-to-but-below-2% target of headline inflation over the medium term.

Eurostat left unchanged its estimate of the even narrower measure of inflation, which also strips out alcohol and tobacco prices, at 1.2% year-on-year in February, confirming its rise from 1.1% in January.

The energy sector saw a 0.3% deflation in February on the year, before the oil price war between Saudi Arabia and Russia erupted in March and before the worst effects of the coronavirus outbreak on the European economy. The reading confirms figures released by Eurostat earlier in March.

Month-on-month inflation rose 0.2% in February, in line with earlier estimates.

(Reporting by Francesco Guarascio @fraguarascio; editing by Jan Strupczewski)