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Eurozone inflation slowed in May, as initially estimated, on falling energy prices, final data from Eurostat revealed on Wednesday. Inflation softened to 1.9 percent in May from 2.2 percent in April. The rate fell below the European Central Bank's 2 percent target for the first time since September 2024. Core inflation that strips out prices of energy, food, alcohol and tobacco, slowed to 2.3 percent from 2.7 percent. The statistical office confirmed the flash estimate published on June 3. On a monthly basis, the harmonized index of consumer prices and the core index remained flat in May. Monthly figures also came in line with initial estimate. Food inflation accelerated to 3.2 percent from 3.0 percent, while services inflation softened to 3.2 percent from 4.0 percent, data showed. At the same time, non-energy industrial goods logged a steady growth of 0.6 percent. Energy prices declined 3.6 percent in May, the same rate of drop as seen in April. Earlier this month, the ECB slashed its interest rates by 25 basis points, marking the eighth reduction in a year. Also, the ECB staff trimmed inflation forecast for this year and next by 0.3 percentage points to 2.0 percent and 1.6 percent, respectively. Core inflation was forecast to average 2.4 percent this year and 1.9 percent in 2026 and 2027. Powered by Commodity Insights
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