Dusseldorf/Frankfurt The inflation rate in the euro area continued to rise in May: consumer prices rose by 8.1 percent compared to the same month last year, as the European statistics office Eurostat announced on Tuesday based on an initial estimate. In April, the inflation rate in the euro area was 7.5 percent.
For Germany, the Federal Statistical Office had already reported a value of 7.9 percent on Monday. However, the calculation method for Germany differs from that at European level.
Inflation has been consistently higher than expected in recent months. It is currently being fueled by the war in Ukraine, which is driving up energy prices in particular.
The strong price increase puts the European Central Bank (ECB) under pressure. Most recently, leading representatives of the central bank signaled an imminent turnaround in interest rates in order to slow the rise in inflation. “Based on the current outlook, we will likely be able to end negative interest rates by the end of the third quarter,” Fed Chair Christine Lagarde wrote in a blog post last week.
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The deposit interest rate, which is decisive for monetary policy, is currently still minus 0.5 percent. This means that banks that hold excess liquidity with the central bank pay negative interest for it. Many experts therefore expect the central bank to raise interest rates by a quarter of a percentage point in July and September.
Individual representatives such as the head of the Austrian central bank, Robert Holzmann, and his Dutch counterpart, Klaas Knot, have even suggested an increase of half a percentage point.
More: Analyst forecasts exceeded: Inflation in Germany rises to 7.9 percent.