Euro zone inflation reaches 2 percent in February, as expected

Consumer prices went up mostly because of a surge in energy prices that rose 9.2% in February

Euro zone annual inflation rose in February by 2 per cent, in line with market expectations, on a surge in energy prices as the bloc's unemployment rate remained stable, estimates from the European Statistics office showed on Thursday.

Inflation in the 19 countries sharing the euro accelerated to 2 percent year-on-year in February, Eurostat estimated, up from 1.8 percent in January, meeting the European Central Bank's medium-term target of below, but close to 2 percent.

But core inflation, which excludes volatile prices of energy and unprocessed food and at which the ECB looks in its policy decisions, was stable at 0.9 percent year-on-year in February, suggesting no immediate change to the central bank's bond buying programme.

Consumer prices went up mostly because of a surge in energy prices that rose 9.2 per cent in February, accelerating from 8.1 per cent the previous month.

Prices for food, alcohol and tobacco went up by 2.5 per cent in February, Eurostat estimated. In the services sector, the largest in the euro zone economy, prices rose 1.3 per cent in February, accelerating from 1.2 per cent in January.

Eurostat's flash estimate for the month does not include a monthly calculation.

The increase in consumer prices mirrored a rise in industry prices.

In a separate release, Eurostat said on Thursday producer prices rose 0.7 per cent in January on the month and 3.5 percent year-on-year, more than market expectations of a 0.6 per cent monthly rise and a 3.2 per cent increase on the year.

As for consumer prices, the rise in producer prices was driven mostly by energy prices that increased 1.8 percent month-on-month, and 9.7 per cent on a yearly basis.

Unemployment in the euro zone remained stable in January at a rate of 9.6 per cent, Eurostat said on Thursday in a separate release.