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Falling inflation adds to pressure on the ECB

February’s drop in euro-zone CPI inflation to 1.8% brought it back below the ECB’s 2% “ceiling” for the first time since November 2010. While much of the recent drop reflects slowing energy inflation, there are growing signs of an easing in core price pressures too. Further likely falls in inflation over the coming months will add to the pressure on the ECB to provide additional policy support to the economy.

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