Eurozone consumer price inflation has topped 3.0% for the first time in three years, as the European Central Bank (ECB) is expected to raise its policy rate soon.
Eurostat, the statistical office of the European Union, said in a preliminary estimate Monday that consumer prices in the eurozone, the 21 countries that use the euro, rose 3.2% year-on-year and 0.1% month-on-month in May.
It marks the first time in two years and eight months that eurozone inflation has exceeded 3.0%, since September 2023 when it reached 4.3%. After registering 1.7% in January, the inflation rate has risen for four consecutive months, far surpassing the ECB's medium-term target of 2.0%.
Energy prices, driven by the war in the Middle East, jumped 5.1% year-on-year in March and 10.8% in April, followed by a 10.9% increase last month. Core inflation, which excludes energy, food, alcohol and tobacco, rose to 2.5%, up 0.3 percentage points from April. By country, Bulgaria (6.3%), Lithuania (5.1%) and Greece (5.0%) recorded the largest increases, while Malta (2.1%), Germany (2.7%) and France (2.8%) saw smaller gains.
Markets expect the ECB to raise its policy rate by 0.25 percentage points at its monetary policy meeting on June 11 and to deliver one more hike by the end of the year.
