Euro zone inflation falls to 6.1%

Euro zone inflation eased more than expected in May falling from 7% in April down to 6.1% in May.

This is the lowest level recorded 15 months the data suggests. Analysts had expected a May reading of 6.3%.

Core inflation, excluding energy and food, also fell more than expected, to 5.3% from 5.6%

Annual inflation in Germany and France dropped more than forecast in May, according to national data released on Wednesday, as prices dipped on the previous month. Price rises in the euro area’s largest economies are now at 12-month lows.

The European Central Bank meets on June 15 to make its latest monetary policy decision. Interest rate sits at 3.5% and an increase is generally expected.

The ECB did not give forward guidance after its May meeting, but it is clear that underlying price headwinds remain.

More interest rate hikes are highly likely in order to control inflation.

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