Eurozone Inflation Eases to 2.2% in April as Services Inflation Climbs to 2.7%

Eurozone consumer prices eased to 2.2% in April, while services inflation rose to 2.7%, pushing core inflation up to 2.7%.

Services Inflation Keeps Climbing

■Services inflation rose to 2.7% in April from 2.4% in March.

■Tourism, education and health services drove the upward pressure.

■Lower energy prices only partially offset the services‑sector price pressure.

Core Inflation Edges Up

■Core inflation (excluding food and energy) edged up to 2.7% in April from 2.5% in March.

■Producer prices remained subdued, while services and retail sectors kept price pressures alive.

■Rising labor costs continue to underpin the services‑sector inflation trend.

ECB’s Policy Stance and Market Expectations

■The ECB held its main refinancing rate steady at 4.50% in its April meeting.

■Policymakers adopted a cautious stance, watching services inflation closely.

■Market participants now price in a possible rate cut to 4.25% by year‑end, contingent on the inflation trajectory.

Gökhan Erez: The modest uptick in euro‑area services inflation could complicate the ECB’s dovish pivot, suggesting that additional tightening may be needed to anchor inflation expectations.