Eurozone price inflation slowed somewhat more sharply than expected in May and core inflation also eased, strengthening the case for moderating the Bank of Central Europe’s rate hike.
Prices rose 6.1% year-on-year last month in the 20 countries that share the European currency, after 7.0% in April, the first estimated data published on Thursday by Eurostat, the European institute for statistics, shows.
It had hit a record in October 2022, at 10.6% year-on-year.
+5.3% excluding food, tobacco and energy
Economists polled by Reuters had expected a slightly less pronounced drop, to 6.3%. Excluding the most volatile items, unprocessed food and energy, inflation also fell to 6.9% from 7.3% last month. The rise in prices without food, energy, alcohol and tobacco fell to 5.3% after 5.6% in April.
For Christine Lagarde, president of the ECB, “inflation is too high and should stay that way for too long.”
“The inflation outlook in Europe is strongly influenced by two opposing factors,” said Carsten Brzeski of ING. “The larger-than-expected drop in energy prices after a mild winter is likely to push headline inflation down faster than recent forecasts suggest,” the economist said.
“On the other hand, recent wage deals and continued pressure on services should keep core inflation high.”
Source: BFM TV
