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Eurozone inflation hits four-year high in February

Manufacturing in Germany is powering ahead contributing to an expected strengthening in overall growth Adam Berry  Getty Images

The highest print of German inflation in four-and-a-half years on Wednesday has already triggered fresh calls from the bloc's biggest economy for the European Central Bank, which targets inflation of below but close to 2 percent, to end loose monetary policy.

Inflation in the 19-nation bloc touched 2% in February, details Eurostat, up from a rate of 1.8% the month before and the highest since January 2013 and is slightly above the ECB's target of just below 2%. In the services sector, the largest in the euro zone economy, prices rose 1.3 percent in February, accelerating from 1.2 percent in January.

Commerzbank's Weil said the European Central Bank will want to wait until the core inflation rate, which strips out volatile factors such as energy, food, alcohol and tobacco, also rises significantly.

Final data is due on March 16.

In December, the ECB said it would extend its bond-buying programme until at least December 2017, and caution that it is unlikely that the central bank will further limit its QE program on the news, at least in the short term.

The German economy grew by 1.9 percent previous year, driven by strong private consumption, increased state spending and higher construction investment, and it is expected to carry its growth momentum through into 2017.

Another report from the statistical agency showed that the jobless rate held steady at a seasonally adjusted 9.6 percent in January, but eased from 10.4 percent in the prior year. Coupled with the ECB's zero interest rates, inflation is also undermining already meager returns from savings accounts.

Eurostat estimates that the number of unemployed people in the eurozone fell by 56,000 to 15.6 million. German unemployment falls Unemployment in Germany dipped in February by more than expected.

The youth unemployment rate in the euro area was 20 percent in January compared to 20.3 percent in December. They hit 0.31 percent earlier on Thursday, adding to Wednesday's 4 bps rise seen after policymakers suggested the Fed was anxious about waiting too long to raise rates in the face of looming economic stimulus from Washington.

In the text of a speech delivered in Ljubljana, Slovenia, he argued that current low borrowing rates offer "few incentives for governments to consolidate their budgets" since debt does not incur high interest costs.