Euro Area: Inflation stable in April
Harmonized inflation was stable at March’s 2.4% in April. Therefore, inflation remained stuck above the European Central Bank’s target rate of 2.0%.
April saw softer increases in prices for non-energy industrial goods and services offsetting a faster increase in prices for food, alcohol and tobacco and a softer decline in prices prices for energy. Meanwhile, the annual rate of core inflation—which excludes volatile energy and unprocessed food prices—declined to 2.8% in April from March’s 3.1%.
On a monthly basis, harmonized consumer prices rose 0.6% in April, slowing from March’s 0.8% increase.
Commenting on the outlook, ING’s Bert Colijn stated:
“Eurozone headline inflation remains stable at 2.4%. With higher energy prices and improving domestic demand, questions about the direction of inflation become louder. Still, we think the economic environment is benign enough for a rate cut in June and expect the ECB to be data-dependent after that.”