Low inflation in the euro area from the target to 1.9 %

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The euro zone inflation fell below the goal of the European Central Bank 2 percent in May for the first time in seven months, in the numbers that the economists said that other interest rates this year were more likely.

The annual inflation reading in May of 1.9 percent fell from No. 2.2 percent in April and less than the expenses of the 2 % analysts in the Reuters poll.

This was the first time that inflation was less than 2 percent since September, when it decreased briefly to 1.7 percent after exceeding the target for more than three years.

The euro fell in immediate trading after the data post on Tuesday, a decrease of 0.3 percent a day at $ 1.141.

In reference to the effect Donald Trump’s tariffDiego Escaro, an economist at the S& P Global Market Intelligence, said that low inflation “will compensate some of the opposite winds on consumption caused by a very unconfirmed economic environment.”

He expected to reduce price pressures more than to come
Months due to the strongest euro, the goods are cheaper and softer
The labor market, adding that the European Central Bank is expected to reduce the standard deposit rate from 2.25 percent to 1.5 percent in the third quarter.

The central bank will make the next interest rate decision and update inflation forecast on Thursday. It expected in March that inflation in the currency area will be held over the goal this year, before it decreased to 1.9 percent in 2026.

In trading after issuing data, the exchange markets continued to expect to reduce another quarter of a point in European Central BankThe standard interest rate on Thursday. This rate will take to 2 percent – the lowest level in more than two and a half years 2024, when the central bank began to reduce borrowing costs.

A quarter -point discounts are priced at this time next year.

Konstantin Veit, a Pimco wallet manager, wrote in a note before issuing numbers on Tuesday, which would mean the reduction this week that the European Central Bank is “entering the final stages of the price cutting cycle”, and Konstantin Veit, a portfolio manager in Pimco, wrote in a note to customers before issuing Tuesday numbers.

He added: “The basic cost pressure continues to dispel it, while reducing the pressure of wages somewhat faster than expected.”

Figures on Tuesday showed that the basic inflation, with the exception of the prices of flying food and energy, decreased to 2.3 percent in May compared to 2.7 percent in April.

The number that was closely monitored for services – a measure of local price pressures – has decreased to 3.2 percent, the lowest level since March 2022. It reached 4 percent in April.