Eurozone inflation data for May show an increase in both headline and core inflation

From Morningstar: 2025-05-28 10:24:00

Eurozone inflation data will be released on June 3, with headline inflation expected to be 1.9% higher than May 2024 levels. Core inflation is forecasted to rise by 2.3% year on year in May. Service inflation was the main driver of headline inflation in April, contributing 1.80 percentage points.

Economists are watching May data to see if service inflation will surprise on the upside again after spiking in April. Goldman Sachs predicts eurozone core inflation to be at 2.44% in May. Oxford Economics forecasts a decline in service inflation due to slowing wage growth and lower commodity prices.

The European Central Bank’s monetary policy meeting on June 5 may include another interest rate cut, with markets expecting further easing amid economic headwinds and US tariff unpredictability. ECB board member Isabel Schnabel noted upward price pressure from US tariffs, but also acknowledged disinflationary forces at work.

Grant Slade, international economist at Morningstar, predicts that flash inflation estimates will remain largely unchanged in June compared to April. Schroders eurozone economist Irene Lauro believes risks to the inflation outlook are elevated due to trade negotiations uncertainty. The asset manager expects June to see the last rate cut this year, taking the deposit rate to 2%.



Read more at Morningstar: Eurozone Inflation: What to Expect from May’s Data