Eurozone inflation leaps to 1.9% in May: Eurostat
BRUSSELS: Inflation in the eurozone leaped to the ECB’s target in May, data showed on Thursday, fuelled by a huge increase in oil prices as the US decided to pull out of a nuclear deal with Iran.
The EU’s statistics authority, Eurostat, said inflation in the eurozone jumped to 1.9 percent in May, a massive jump from the 1.2 percent recorded in April. That puts inflation right at the European Central Bank’s target of close to, but just below 2.0 percent.
Analysts believe increased inflation will heap pressure on the ECB to scale back its massive stimulus programme that has helped keep government borrowing prices at super low levels.
This would be especially sensitive in heavily-indebted Italy, which is hit by a political crisis and benefits greatly from the ECB bond-buying programme. The strong jump in inflation was mainly due to energy prices, which shot up by a dizzying 6.1 percent in May compared to 2.6 percent the month before.
Eurostat also said the jobless rate in the single currency area fell to 8.5 percent in April, a nine-year low and down from 8.6 percent a month before.