Eurozone inflation drops

Inflation across the 17 countries that use the euro currency dropped slightly in March, keeping it in line with the European Central Bank's target, the European Union statistics office said on Wednesday.

Consumer prices in the eurozone increased 1.7 percent last month over March last year, down from 1.8 percent in February. The ECB aims to keep inflation below 2 percent.

Energy prices were mostly responsible for the lower inflation figures. They rose by 1.7 percent last month, down from 3.9 percent inflation in February.

Economists had widely expected the drop, though some had anticipated a greater fall to 1.6 percent.

It was the third straight month of declining inflation in the eurozone, and a full 1 percentage point drop from the rate one year ago. March also saw the lowest inflation rate since August 2010, as the recession and record-high eurozone unemployment keep a damper on wages and consumer spending.

The figures come ahead of an ECB policy meeting on Thursday, in which analysts expect the bank's key interest rate to remain at its record low of 0.75 percent.

Eurostat, the EU's statistics authority, regularly releases a preliminary estimate of inflation at the end of each month, then revises the figure at the middle of the following month as more data becomes available.

acb/jr (AP, dpa)