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Eurozone Inflation Drops More Than Expected to 6.1% in May as Pressures Ease

Preliminary data reveals that inflation in the Eurozone experienced a larger-than-expected decline in May. Headline inflation dropped to 6.1% from 7% in April, marking the lowest figure since February 2022 and exceeding the anticipated decline of 6.3%.

Furthermore, the core inflation rate, which excludes energy and food prices, also decreased to 5.3% in May, falling below the expected rate of 5.6%.

The report highlights that annual inflation rates in Germany and France witnessed larger-than-expected decreases in May, following a drop in inflation levels the previous month. Both countries are now experiencing the lowest inflation rates recorded over the past 12 months.

These developments come as the European Central Bank (ECB) prepares to convene on June 15 to discuss monetary policy decisions. This meeting follows a gradual increase in interest rates by the ECB, which elevated rates from -0.5% last year to 3.25% in May, the highest level since November 2008.

The lower-than-expected inflation figures in the Eurozone indicate a possible easing of fundamental pressures. While this may alleviate concerns surrounding rising consumer prices, policymakers will continue to monitor the situation closely. The ECB’s upcoming meeting will be crucial in assessing the appropriate monetary policy measures to support economic stability and address any emerging inflationary or deflationary risks.

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