According to the European calculation method, prices in Germany increased by 6.3 percent year on year, while inflation was still 7.6 percent in April. All in all, a steeper decline than economists expected. Good news also comes from France, where the cost of living has increased by 6 percent, also less than expected. Last month, French inflation was still at 6.9%. However, food prices are still 14% higher than in May last year.
According to the French statistical agency Insee, the French economy grew by 0.2% in the first quarter compared to the previous quarter.
Inflation is also cooling in Spain, going from 3.8 percent in April to 2.9 percent in May. In Italy, life has become more expensive by 8.1 per cent, although down compared to April’s inflation, but less strong than expected. Just like the French, Italy’s statistics agency Istat has also released new economic data. Istat reported economic growth of 0.6 percent in the first quarter.
Inflation data indicates whether the European Central Bank’s (ECB) interest rate hikes are starting to have an impact. If that’s not enough, further rate hikes are to be expected. ECB policy makers will meet again in mid-June. In general, interest rates are expected to rise by a quarter of a percentage point. CBS will release the figures for the Netherlands tomorrow.