People walk through the streets of Montmartre, Paris, France, on April 23, 2024.
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Price rises in the euro zone held steady at 2.4% in April, while the economy returned to growth in the first quarter, according to preliminary figures published on Tuesday.
The headline inflation rate of 2.4 percent was in line with expectations of economists polled by Reuters. On a monthly basis, the inflation rate reached 0.6%.
Core inflation, excluding energy, food, alcohol and tobacco, fell to 2.7% from 2.9% in March. The impact of the year-on-year decline in energy prices continued to be moderate, reaching -0.6% compared to -1.8% in March.
Meanwhile, GDP rose 0.3% during the first three months of the year, slightly better than economists' consensus expectations.. GDP for the fourth quarter of 2023 was revised from no growth to a contraction of 0.1%, meaning the eurozone was in a technical recession in the second half of last year.
Market expectations are growing that the European Central Bank will start cutting interest rates at its next monetary policy meeting on June 6. 70% chance of June cut, according to LSEG data, with Higher bets on a cut in July or September.
A number of voting members of the European Central Bank told CNBC earlier this month that they expect a rate cut in June, citing the need to prevent an excessive slowdown in the eurozone economy. They also pointed to risks arising from oil prices and volatility in the Middle East.
Analysts at BNP Paribas had expected the key rate to remain steady, largely due to higher crude oil prices, and that this result would continue to support the June cut. After June, interest rate expectations became more uncertain, they said in a note before the latest inflation figures were published.
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