Harmonized inflation increases to over one-year high in April

Latest reading: Harmonized inflation came in at 2.0% in April, which was up from March’s 1.8%. April's result represented the highest inflation rate since February 2024 and matched the ECB’s target. Looking at a breakdown, price pressures picked up for housing and utilities. The figure was pushed up by a low base effect; energy prices plunged in 2024 after surging in prior years as a result of the global energy crisis. Annual average harmonized inflation was unchanged at March's 1.2% in April. Meanwhile, consumer price inflation rose to 2.2% in April from March’s 2.0%. Finally, harmonized consumer prices increased 0.41% from the previous month in April, a smaller increase than March's 0.67% increase. April's result marked the weakest reading since January.

Outlook: Harmonized inflation is seen averaging broadly in line with the ECB’s 2.0% target this year, with lower oil prices offset by higher natural gas prices.

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