Euro zone inflation, May 2025

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Euro zone inflation, May 2025

Shoppers buy fresh vegetables, fruit, and herbs at an outdoor produce market under green-striped canopies in Regensburg, Upper Palatinate, Bavaria, Germany, on April 19, 2025.

Michael Nguyen/NurPhoto via Getty Images

Euro zone inflation fell by more than expected to 1.9% in May, below the European Central Bank’s 2% target, flash data from statistics agency Eurostat showed Tuesday.

Economists polled by Reuters had expected the May reading to come in at 2%, compared to the previous month’s 2.2% figure.

Inflation has been moving back towards the 2% mark throughout 2025 amid uncertainty for the euro zone economy.

The latest figures will be considered by the European Central Bank as it prepares to make its next interest rate decision later this week. Markets were last pricing in an around 95% chance of interest rates being cut by a further 25-basis-points on Thursday.

Back in April, the central bank took its key rate, the deposit facility rate, to 2.25% — nearly half of the high of 4% notched in the middle of 2023.

But the global economic

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remains muddied. U.S. President Donald Trump’s protectionist tariff plans have been casting shadows over the global economic

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, with his so-called “reciprocal” duties — which are also set to affect the European Union — widely seen as harmful to economic growth. Their immediate potential impact on inflation is less clear, with central bank policymakers and analysts noting that it could depend on any potential countermeasures.

Despite the transatlantic tumult, the Organisation for Economic Co-operation and Development in its latest Economic

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report out on Tuesday said it was expecting the euro area to expand by 1% in 2025, unchanged from its previous forecast. Euro area inflation is meanwhile projected to come in at 2.2% this year, also in line with the March report.

This is a breaking news story, please check back for updates.

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#Euro #zone #inflation

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