According to the so-called flash estimate from Eurostat
, Euro area inflation rose to 3.5% in March, the highest ever since the introduction of the euro in 1999. There are two interesting aspects of this. First of all, this is likely only the first in a series of reports showing rising price inflation in March. When the numbers from for example the U.S., Britain, Sweden are released we are likely to also see pick-ups in inflation there too. The reason for this is the sharp rise in oil prices between February and March as well as the continued impact of the rise in the price of food commodities.
Secondly, the implication of this will certainly< be that ECB interest rate cuts are out of the question in the coming months. Indeed, influential ECB board member Axel Weber recently expressed
a preference for raising interest rates. Weber is of course long known to be a hawk, and given the weakness of some parts of the Euro area, that does not appear likely to happen. But it is probably not less likely than a cut at this point.