Euro zone inflation rises just as ECB prepares to cut rates

FRANKFURT, May 31 (Reuters) – Euro zone inflation rose in May, data showed on Friday, in a sign the European Central Bank still faces a slow and uncertain journey to rein in prices.

The bigger-than-expected increase in inflation was unlikely to stop the ECB from lowering borrowing costs from a record high next week, but may cement the case for a pause in July and a slower pace of interest rate reductions in the coming months.

Consumer prices in the 20 countries that share the euro rose by 2.6% year on year in May, inching away from the ECB’s 2% goal after increases of 2.4% in the previous two months, according to Eurostat’s flash estimate.

Source: REUTER