Buy buyers on April 19, 2025 fresh vegetables, fruit and herbs on an outdoor product under green streaked roofs in Regensburg, Upper Palatinate, Bavaria, Germany.
Michael Nguyen/Nurphoto about Getty Images
The inflation of the euro zone fell under the 2% goal of the European Central Bank in May and reached a cooler, the expected 1.9% in strong declines of the services, as Flash data of the Statistics Authority Eurostat showed on Tuesday.
Economists surveyed had expected that the reading in May had 2% of the previous month in May.
The inflation pressure of the closely observed services significantly cooled down to 3.2% compared to the previous 4% reading. The so-called core inflation, which also excludes energy, food, tobacco and alcohol prices, also fell from 2.7% in April to 2.3% in May.
“The severe decline in inflation in the services in May, to its lowest level for more than three years, confirms that the leap of the previous month was only a Blip, which was obtained east of the previous month, and that the downward trend in inflation of the services was still on the right track,” said Jack Allen-Reynolds, deputy chief euro zone economist in the capital.
Inflation has withdrawn during the uncertainty of the Euro Zone economy during the uncertainty of the euro zone economy towards 2%.
The latest figures are considered by the European Central Bank because it is preparing to make their next interest decision later this week. Already in April, the central bank took over its plaitine, the deposit system rate, to 2.25% – almost half of the high of 4% in the middle of 2023.
With a chance of around 95%, the markets had the last prize design that interest rates were reduced by another 25 basis points on Thursday. In view of the far-expected impending interest rate levels, the data may not have a strong influence on Tuesday the ECB decision this week, said Allen-Reynolds.
“But the Inflation data from May strengthen the case for a further cut at the following session in July,” he noted.
However, the global economic prospects are still confused. The protectionist tariff plans of US President Donald Trump have thrown shadows about the global economic outlets, whereby its so-called “mutual” duties, which also influence the European Union, are considered harmful to economic growth. Their immediate potential effects on inflation are less clear, although political decision -makers and analysts find that this could depend on potential countermeasures.
Despite the transatlantic tumult, the Organization for Economic Cooperation and Development in its most recent economic outlook announced on Tuesday that the euro area will be expanded by 1% in 2025, which is unchanged compared to its earlier forecast. In the meantime, inflation in the euro region is forecast this year with 2.2%, also according to the March report.
According to the new inflation data, the returns of the euro country bonds were recently lower, with the German 10-year bonded return declining by more than two basis points to 2.499%, while the return of the French 10-year bond decreased by more than one base point to 3.169%.
The euro has now taken by $ 0.3% lower.
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