- Mario Draghi, ECB President
The Euro zone inflation returned firmly to green territory in May, as the ECB's quantitative easing programme has started to produce desired results. Euro area's annual inflation came in at 0.3% in May 2015, up from 0.0% in the preceding month, according to Eurostat. On a monthly basis, prices in the bloc climbed 0.2%, after flat growth seen in April. Market participants had predicted a 0.2% growth rate in prices. Energy prices increased 1.0% over the month in May, services climbed 1.3%, followed by food, alcohol and tobacco at 1.2%, while non-energy industrial goods rose 0.3%, according to Eurostat. Meanwhile, core inflation, a measure that excludes volatile components such as food and energy, added 0.9 % in May, compared to the 0.6% seen a month before and the 0.9% estimated in the preliminary reading. Despite some relief, the headline inflation has remained in what the European Central Bank calls the 'danger zone', below 1% since October 2013, that is, for 20 consecutive months.
However, stubbornly sluggish labour market has weighed on demand. Despite a support received by a relatively cheap Euro and low energy prices, the whole Euro zone risks being trapped in a period of tepid growth accompanied by a slow inflation growth.
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