Euro area annual inflation accelerates more than expected in May

By Tuba Ongun

The euro area annual consumer inflation rate accelerated to 2.6% in May, above the market forecast of 2.5%, according to flash estimates released on Friday.

The headline inflation rose from 2.4% in both March and April, the Eurostat data showed.

Energy costs increased by 0.3% from a year earlier in May, shifting from a 0.6% decline in April.

The annual price hike for food, alcohol, and tobacco slowed to 2.6% in May, following a 2.8% rise in the previous month.

Services is expected to have the highest annual rate in May with 4.1%, up from April's 3.7%.

On a monthly basis, the euro area consumer price index gained 0.2% in March, slowing from a 0.6% hike in the prior month.

In May, energy prices in the single currency area dropped 1.2% month-on-month, while food prices rose 0.2%.