Inflation across the euro zone rose to 2.6% in May, the euro zone's statistics agency Eurostat said on Friday.
The Eurostat data, based on provisional “flash estimates” to be confirmed in mid-June, showed annual inflation rose 0.2 percentage points from April, reaching 2.6% in May, up 0.2 percentage points from April.
Luxembourg's inflation rate is following this trend, with prices expected to rise 0.2% in May from April, returning to the 3.2% level seen in December, February and March, according to Eurostat data.
Across the euro area, the highest price increases in May were in the services sector, at 4.1%, followed by food, alcohol and tobacco at 2.6%.
In the energy sector, prices rose in May, reversing the industry's recent trend of falling costs over the past year, with costs rising 0.3% year-on-year. Prices rose year-on-year in all nine sectors surveyed by Eurostat.
Luxembourg's official statistics agency, STATEC, has not yet released its figures for May but calculated annual inflation at 2.4% in April, close to the central bank's 2% target. STATEC and Eurostat use different methodologies to calculate inflation.
Inflation at three-year low still expected to trigger wage growth
The European Central Bank is still widely expected to cut interest rates on the 6th. June and economists agree that rising inflationary pressures are unlikely to thwart that decision.
Interest rates have been stuck at a record high of 4.5% since September 2023 as the ECB battles inflation. With signs of victory in the battle, interest rates will almost certainly fall. The question economists are now asking is whether this will be the first of a series of rate cuts or if the risks of inflation are still too great.
Eurostat's flash estimate will only include data for the euro area, but its full monthly inflation report, due for publication in mid-June, will include the whole EU and single market member states.
