The price pressure in the euro area is weakening.
(Photo: AP)
Frankfurt The price pressure in the euro area eased significantly in May. Consumer prices rose by 6.1 percent compared to the same month last year. This was announced by the European statistical office Eurostat on Thursday based on an initial estimate. Experts had previously expected a value of 6.3 percent. In April, inflation was seven percent.
The much-noticed core inflation rate is now 5.3 percent after 5.6 percent in the previous month. The inflation rate adjusted for energy and food is considered a good indicator of the medium-term price trend. The statistical offices in Germany, France, Spain and Italy had previously reported a lower price increase.
Slightly less price pressure came from food and beverages in May, although the increase of 12.5 percent is still high. Industrially manufactured goods and services also did not rise as much as in April. Energy prices even fell by 1.7 percent compared to the same month last year.
However, the inflation rate is still well above the medium-term target of two percent set by the European Central Bank (ECB). At this value, the central bank sees price stability.
In order to keep inflation down, the ECB has recently raised interest rates seven times in a row to 3.75 percent. Experts expect further rate hikes. However, the differences among ECB officials could now widen as the central bank approaches the end of the cycle of interest rate hikes.
Most recently, several currency watchdogs considered it likely that the ECB would raise interest rates by a further 0.25 percentage points in June and July.
With agency material.
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