Inflation in the eurozone slowed for the first time in five months, offering relief to the European Central Bank (ECB) as it prepares for its policy meeting this week. According to Eurostat, consumer prices rose 2.4% year-over-year in February, down from 2.5% in January, breaking a streak of four consecutive months of rising inflation.

Core inflation, which excludes food and energy, also declined, coming in at 2.6%, compared to 2.7% the previous month. Meanwhile, services inflation eased to 3.7% from 3.9%, indicating broad-based cooling in price pressures across the economy.

The latest data reinforce expectations that the ECB will move forward with a rate cut in its Thursday meeting. Investors widely anticipate a quarter-point reduction, bringing the deposit rate down to 2.5% as the central bank seeks to support economic growth while ensuring inflation remains under control.

With inflation now on a downward trajectory, policymakers may feel more confident about easing monetary policy. However, the ECB could still take a cautious approach, watching for potential risks such as wage growth and geopolitical uncertainties before committing to further rate cuts.

Markets will closely follow ECB President Christine Lagarde’s remarks after the meeting, looking for clues on the bank’s future policy direction and whether additional rate cuts could be expected in the coming months.