Euro zone consumer prices grew faster than expected in March at 2.1 per cent year-on-year, the European statistics office said today.
Economists polled had expected inflation to ease to 2 per cent in March from 2.1 per cent in February.
Eurostat's flash estimate for March inflation does not include a month-on-month change or any full data.
The European Central Bank, which aims to keep inflation below, but close to 2 per cent, expects inflation to decline over the medium term. It has kept interest rates at historic lows of 2 per cent since mid-2003.
Although the ECB has made clear over the past month that its next interest rate move will be up, analysts do not expect the central bank to raise rates before growth gathers some steam.
ECB vice president Lucas Papademos told Italian newspaper Corriere della Sera today he expected growth in the euro zone to pick up this year and next.
But the European Commission is less optimistic and expects to revise down its 2005 growth forecast to "slightly below" the 2 per cent seen earlier when it presents its new economic forecasts on April 4th.
The commission's business climate and consumer and business sentiment surveys for March, released today, were more in tune with a more cautious growth outlook.