Eurozone consumer prices rose 2.6% year-on-year in May and 2.4% in April, European Union statistics showed, exceeding the European Central Bank’s (ECB) 2% target. .
The ECB is expected to cut rates next week, despite a bigger-than-expected hike announced by the EU’s statistics agency Eurostat.
The central bank rallied amid tensions over Russia’s invasion of Ukraine, as inflation soared after Russia cut gas supplies to Europe, and as the prolonged impact of the coronavirus pandemic continued to clog supply chains for parts and raw materials. It began aggressively raising interest rates from July 2022.
As inflation gradually slows from these peaks, central banks are considering lowering interest rates to stimulate economic growth again, but any rate cuts are likely to be very gradual, especially given the latest numbers. Observers point out that this is high.
What did Eurostat say?
Core inflation, which does not include prices for energy, food, alcohol and tobacco, rose to 2.9% in May from 2.7% in April.
The largest price increase in May was in the services sector, which rose 4.1% from 3.7% in April, while prices for food, alcohol and tobacco fell from 2.8% in April to 2.6% in May. .
However, after falling 0.6% in April, energy prices rose again by 0.3% in May.
The country with the lowest inflation rate in May was Latvia at 0.2%, followed by Finland at 0.5%. Belgium had the highest rate at 4.9%.
Prices in Germany rose 2.4% in May compared to the same month last year, according to preliminary figures released Wednesday by Germany’s federal statistical agency Destatis.
tj/ab (AP, AFP, Reuters)
