Brussels – Inflation is on the rise again in the euro area. May saw an increase of 0.2 percentage points compared to April. Up to 2.6 percent. In the interim release, Eurostat It notes that from April to May, the index was impacted by an increase in services. Industrial goods (+4.1%, up from 3.7% in April) and energy (+0.3%, down from -0.6% in April) grew, while non-energy manufactured goods were broadly stable (+0.8%, up from 0.9% in April).
At member state level, Eurostat expects inflation to rise in three of the euro area's top four countries: Germany (from 2.4% to 2.8%), France (from 2.4% to 2.7%) and Spain (from 3.4% to 8.8%). Bucking the trend ItalyInflation remains well below the 2% benchmark target and is trending downwards (from 0.9% to 0.8%).
These data do not change the European Central Bank's guidelines.announced its intention to ease its tight monetary policy, Lowering interest ratesThe first sign of this was when European Central Bank President Christine Lagarde said that June would be a decisive time to make such a decision. Later, Governing Council member Philip Lane reiterated this more explicitly in a speech at the Dublin Institute of International and European Affairs on Monday (May 27): “At our June meeting, once we publish our updated assessment of the inflation outlook, we will be able to make a decision.” [.] To further strengthen our confidence that inflation is converging to our target in a sustained manner, It would be appropriate to reduce the current restrictive level of monetary policy.Translated, this means lowering interest rates. The prediction is 0.25 points (-0.25).
At the moment, all eyes are on Frankfurt and what the Governing Council will decide at its next meeting scheduled for next week (6 June). For Eurotower, after raising hopes of a rate cut, a policy reversal seems unrealistic at the moment. Eurostat inflation data shows an upturn, hinting at the next course of monetary policy. After implementing the announced rate cut, the central bank could decide to keep policy on hold for the coming months.
English version by Withub's translation service
