Euro Area annual inflation was -0.2 % in February 2016, down from 0.3 % in January 2016. Looking at the main components of euro area inflation, services have the highest annual rate in February (1.0 %, compared with 1.2 % in January), followed by food, alcohol & tobacco (0.7 %, compared with 1.0 % in January), non-energy industrial goods (0.3 %, compared with 0.7 % in January). All the figures are positive apart from energy, that dragged down drastically the overall inflation for February (-8.0 %, compared with -5.4 % in January).
Each of the main components contributes in varying degrees to the headline inflation in the euro area. In terms of weight, services is the largest component, accounting for around 44.2 % of individual consumption expenditure in the euro area. It is followed by non-energy industrial goods with around 26.6 %. Food, alcohol & tobacco and energy account for around 19.5 % and 9.7 %, respectively. Together, they comprise less than one third of euro area expenditure, but they have significant impacts on the headline inflation as their levels tend to fluctuate significantly more than the other components.
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