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BRUSSELS (Reuters) – Euro zone inflation slowed further year-on-year in May, as expected, pulled down by falling energy prices, data from the European Union\’s statistics office Eurostat showed on Wednesday.
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Eurostat said consumer prices in the 19 countries sharing the euro fell by 0.1% month-on-month for a 0.1% year-on-year rise — as expected in a Reuters poll of economists — a deceleration from 0.3% year-on-year in April and 0.7% in March.
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More costly food, alcohol and tobacco added 0.64 percentage points to the final year-on-year reading for May, more expensive services added another 0.59 point and industrial goods added 0.06 point, but a plunge in energy prices subtracted 1.20 point.
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Excluding the most volatile elements of energy and unprocessed food prices — what the European Central Bank calls core inflation — prices were flat month-on-month and rose 1.2% year-on-year in May, accelerating from 1.1% in April.
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An even narrower measure often looked at by financial markets which also excludes changes in prices of alcohol and tobacco, was also flat month-on-month and unchanged from April at 0.9% growth year-on-year.
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The ECB wants to keep the overall headline inflation below, but close to 2% over the medium term.
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(Reporting by Jan Strupczewski; editing by Philip Blenkinsop)
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