- This will create a headache for those who set interest rates in the single currency bloc.
- The increase is unlikely to deter the ECB from cutting rates by a quarter of a percentage point
- Economists expected a figure of 2.5%
Headache: ECB President Christine Lagarde
Eurozone inflation rose to a higher-than-expected 2.6 percent last month, according to official figures.
This will create a headache for interest rate-setters – including European Central Bank (ECB) President Christine Lagarde – in the single currency bloc.
The rise from 2.4 percent in April is seen as unlikely to deter the ECB from cutting rates by a quarter of a percentage point on Thursday.
But economists had expected a figure of 2.5 percent.
And tougher-than-expected inflation will make it less likely that the ECB will follow a June rate cut with another in July.
Bert Colijn of ING Bank said: “Although the European Central Bank looks set to lower rates next week, the debate over the extent to which the ECB can release the brakes on the economy over the rest of the year will be heated.”
