Eurozone inflation climbs to 3.2 per cent in May as energy, services prices heat up – Firstpost

Euro area inflation accelerated in May 2026 as higher energy costs and a rebound in services prices added fresh pressure on households and policymakers across the currency bloc. Annual inflation in the euro area is expected to reach 3.2 per cent in May 2026, up from 3 per cent in April, according to a flash estimate released by Eurostat, the statistical office of the European Union.

The latest rise keeps inflation above the European Central Bank’s (ECB) medium-term target of 2 per cent, highlighting the challenge of bringing price growth under control while supporting economic activity.

Energy continued to be the biggest driver of inflation among major components. The segment recorded the highest annual increase, with prices expected to rise 10.9 per cent in May, slightly higher than 10.8 per cent in April.

Services inflation, which is closely tracked by policymakers as a measure of domestic price pressures, also accelerated sharply. Prices in the category rose 3.5 per cent year-on-year in May, compared with 3 per cent in April.

However, food inflation showed signs of cooling. Inflation in food, alcohol and tobacco eased to 2 per cent in May, down from 2.4 per cent in April. Processed food, alcohol and tobacco inflation slowed to 1.1 per cent, while unprocessed food inflation remained higher at 4.2 per cent.

Prices of non-energy industrial goods remained relatively stable, with inflation edging up to 0.9 per cent in May from 0.8 per cent a month earlier.
Underlying inflation indicators also pointed to renewed pressure. Core inflation, which excludes energy, food, alcohol and tobacco, increased to 2.5 per cent in May, compared with 2.2 per cent in April.

On a monthly basis, overall consumer prices increased by 0.1 per cent in May. Services prices recorded a monthly increase of 0.4 per cent, while energy prices declined 1.1 per cent compared with the previous month.

The latest inflation figures come as the ECB continues to evaluate the path of monetary policy amid competing concerns over sticky price pressures, economic growth and consumer demand across the euro area.