ECB appears eager to raise interest rates

THE eurozone's Harmonised Index of Consumer Prices (HICP) may have risen above 2% again in February, but in reality the figures should be of great comfort to the ECB.

The core Harmonised Index of Consumer Prices (HICP) rate, which excludes energy and unprocessed food, fell to 1.6%.

Thus, having been stuck at 2% or above for a number of years, core inflation has at last decelerated to well under 2%. The recent decline reflects two factors in particular. First, increases in administrative health charges in early 2004 have now dropped out of the annual rate. Second, clothing prices have declined recently.