Easter price push keeps ECB on track for ending stimulus

Brussels/Frankfurt: An early Easter helped drive a pick-up in euro zone inflation in March, keeping the European Central Bank on track with preparations to wind down its huge stimulus programme in coming months.
Inflation in the 19 countries sharing the euro was 1.4 per cent year-on-year, European Union statistics office Eurostat estimated on Wednesday - in line with market expectations and up from 1.1 per cent in February.
That also put the pace of price rises on a par with the full-year forecast outlined by the ECB, where a debate is in full swing on how and when to end the 2.55 trillion euro purchase scheme it launched in 2015 to fight off the threat of deflation.
The March rise, to the fastest pace of inflation so far this year, was partly due to an earlier Easter pushing up the price of package holidays and accommodation, a rise in the indicator's services component to 1.5 per cent suggested.
While inflation remains short of the ECB's target of near 2 per cent, several policymakers now see it as robust enough to start winding down the purchase programme.
"This year's low point of the inflation rate is behind us," Alexander Krueger, an economist at Germany's Bankhaus Lampe, said.
"The foreseeable further increase in the inflation rate should encourage the ECB to slow down its asset purchases from October onwards and to end them in December."
Two ECB policymakers, Klaas Knot and Ewald Nowotny, said last week the risk for the central bank was to move too slowly in withdrawing its extraordinary stimulus measures.
The ECB's favoured core inflation measure, which strips out volatile energy and unprocessed food prices, rose to 1.3 per cent year-on-year in March from 1.2 per cent in February, also as expected.
However, another core gauge that many economists look at, excluding also alcohol and tobacco, held at 1.0 per cent.
"With core inflation unchanged at a low level, the Bank will continue to stress its patient and persistent approach to monetary policy normalisation," Jessica Hinds, an economist at Capital Economics, said.
Separately on Wednesday, Eurostat said unemployment in the euro zone fell to a nine-year low of 8.5 per cent in February, from 8.6 per cent in January.