April inflation in the euro area remained above the European Central Bank's (ECB) 2% target as expected, with a rise in services prices offsetting a fall in energy prices. Year-on-year inflation was 2.2 %, according to Eurostat data, with prices rising by 0.6 % month-on-month.
The fall in energy prices was the result of the weakening of oil markets, which are being affected by US President Donald Trump's new tariff policy. The direct impact of the trade measures on European inflation is not yet apparent, but officials warn that the growing uncertainty could hamper consumption and corporate investment in the short term, which could have a disinflationary effect.
The result slightly disappointed analysts' expectations, who had expected inflation to fall to 2.1 %.
Inflation is expected to return to the 2% target in the coming months, supported by a strengthening euro, which has gained almost 10 % against the dollar this year.
While inflation is stagnating, output in the euro area remains weak. According to an S&P Global survey, industrial activity has fallen again, albeit at the slowest pace in three years.
gnews.cz - GH
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