Euro zone May inflation confirmed at 6.1% year-on-year, core eases

BRUSSELS – Euro zone consumer inflation sharply decelerated in May, the European Union’s statistics office confirmed on Friday, with the core price growth measure, watched closely by the central bank, also slowing.

Eurostat confirmed its earlier estimates that consumer in the 20 countries did not change at all month-on-month in May resulting in a 6.1-percent rise year-on-year, down from 7 percent year-on-year in April.

The contribution from energy prices, long the main driving force of inflation, was negative in May at 0.09 points and the main driver became the cost of food, alcohol and tobacco which added 2.54 points to the final figure.

Euro zone producer prices fell in March

The second biggest contributor was the rising prices of services, adding 2.15 points, with industrial goods adding another 1.51 points.

The European Central Bank wants to keep inflation at 2 percent over the medium term and has been raising interest rates quickly since the middle of last year to curb inflation.

ECB hikes rates to 22-year high and says not done yet

The ECB raised interest rates again on Thursday to a 22-year high of 3.5 percent and said it would move again in July, continuing what has been the fastest pace of monetary tightening in the bank’s quarter century existence.