Eurozone inflation falls in May
Eurozone inflation eased to an annual rate of 2.7pc in May in a surprise move that takes some pressure off the European Central Bank (ECB) to keep raising interest rates.
However, it remains stubbornly above the 2pc level that the ECB is targeting.
The figure fell from 2.8pc in April, the European Union statistics agency Eurostat said today - defying the increase expected by financial markets.
Eurostat's report was only a first estimate of inflation and did not contain details on why inflation eased but this is most likely a result of a dip in oil prices.
The ECB raised its key rate by a quarter-point to 1.25pc in April, and is assessing how fast to continue with increases to prevent higher inflation from being built into the economy through wage hikes.
The bank relies more on forecasts than on monthly figures, which look to the past, however.
Bank president Jean-Claude Trichet has said the ECB is determined to keep inflation from getting out of hand.
The bank has stayed with an anti-inflation message even though higher rates could make life harder for the smaller eurozone countries — including Ireland — that are struggling with debt crises and recessions.
Meanwhile, the eurozone's unemployment rate was unchanged at 9.9pc in April.