Euro area inflation falls to 1.2%, piling pressure on ECB

  • by Ahmed Mamdouh
  • June 4, 2019, 16:0 AM
  • 101 Views
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Euro area inflation, measured by the consumer price index, showed a more than predicted fall in May, adding pressure on the European central Bank before its policy meeting on Thursday.

CPI flash estimate in the 19-nation region plunged to 1.2 percent in the year ended May, down from 1.7 percent in April. That came beneath analysts’ projections of 1.4 percent.

The core CPI reading also retreated to 0.8 percent from an upwardly revised of 1.3 percent in April, coming below forecasts of 1.0 percent.

Eurozone-Inflation-Ofeed.PNG

Energy prices decorated to 3.8 percent year-on-year in May from 5.3 percent in April, whilst services inflation plummeted to 1.1 percent, from 1.9 percent, according to Eurostat.

Price pressures remain “uncomfortably” low, some of the ECB members expressed their concerns according to April’s meeting minutes.

The data will put ECB policymakers under pressure, as inflation will remain away from the ECB’s target of close to 2 percent.

The ECB will probably hold interest rates at their record low on Thursday, while may cut both growth and inflation outlook for the eurozone.

Separately, euro-area unemployment rate fell to 7.6 percent -- the lowest since August 2008 -- from 7.7 percent in March.

As of 11:53 GMT, the euro extended its advance for a third straight session to hover at $1.1257 after hitting a peak at $1.1277. 

Ahmed Mamdouh

Ahmed Mamdouh is the head of the English Fundamental Analysis at Ofeed.com, with 11 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from the American University in Cairo and a Bachelor Degree in Economics from the Faculty of Economics and Political Science, Cairo University.

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