Euro Area: Inflation rises to new record high in May amid broad based increases

Euro Area Inflation May 2022

Euro Area: Inflation rises to new record high in May amid broad based increases

Harmonized inflation jumped to 8.1% in May, from April’s 7.4% reading, marking the highest print on record. Therefore, inflation moved further above the European Central Bank’s target rate of 2.0%. May’s result was due to faster increases across the boards in prices for energy, food, alcohol and tobacco, non-energy industrial goods, and services.

On a monthly basis, harmonized consumer prices soared 0.8% in May, above March’s 0.6%. Core inflation, which excludes volatile energy and unprocessed foods prices, jumped to 4.4% in May from April’s 3.9%, marking the highest print since records began.

Commenting on the release, Bert Colijn, senior economist at ING, noted:

“Inflation increased across the board thanks to continued energy market volatility on the back of sanctions, soaring food prices and core inflation increasing due to businesses pricing through high producer prices. Oil prices have trended higher again over the course of the month and the oil sanctions announced by the EU yesterday add to expectations of oil prices remaining at an elevated level. That delays the decline in headline inflation, especially now that food and core inflation are also on the rise.”

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