MNI: Euro Area Infla Spikes Higher in May; At ECB Target Level

--EMU Flash May HICP +1.9% y/y vs April +1.2% y/y

     LONDON (MNI) - Euro area inflation surprised to the upside in May, with

both headline and core data rising faster than market expectations, according to

a flash report published by Eurostat Thursday.

     Headline harmonised inflation (HICP) jumped to 1.9% in May from April's

1.2%, the data showed. It was the first time inflation was around the European

Central Bank's 'close to but below 2%' target since the spring of 2017. 

     Before the spike in January and April 2017, the last time inflation tested

these levels was January 2013.

     Core inflation, which strips out the prices effects from food, alcohol,

tobacco and energy, also jumped on the month, sharply higher to 1.1 % y/y from

0.7% in April.   

     Ahead of the release, analysts were near unanimous in expecting a higher

reading for both core and headline inflation, but the numbers are still above

expected.

     Services inflation reversed all of April's surprise deceleration, higher by

1.6% y/y, after April's reading of 1.0%.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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