- Thanos Vamvikidis, head of European G10 forex strategy at Bank of America Merrill Lynch
Prices of electricity, fruit and vegetables helped to boost consumer prices in the Eurozone off its three-year low last month, suggesting some stabilization in the struggling to grow region. Figures from the EU statistics office Eurostat showed that inflation picked up on both monthly and yearly basis, edging up 0.1% and 0.2%, respectively. With the overall inflation rate at 1.4%, consumer price pressure in Europe's largest economy jumped to 1.6%; France recorded a smaller gain, while Italy stayed flat at 1.3%. The core inflation, which measures the change in the price of goods and services purchased by consumers, and excludes volatile food, energy, alcohol and tobacco, gained 1.2% year-on-year in May. During the last several months, the Eurozone inflation has declined markedly and moved further for the ECB's target, and even latest figures are suggesting there is plenty room from improvement.
During the last policy meeting, Mario Draghi decided to leave key interest rate unchanged, however, slightly lowered its growth outlook and offered a raft of other policy options in case the economy does not emerge from its deepening recession later this year. In the meantime the malaise of the 17-nation economy was clearly visible in a 0.5% drop in employment in the first quarter of a year, while the jobless rate soared to a fresh high in April, with 19.4 million people being out of work.
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