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Eurozone economic mood rises

Eurozone economic sentiment improved more than expected in May, but inflation expectations fell again, raising the threat of deflation. A monthly survey by the European Commission, released yesterday, showed economic sentiment in the 16 countries using the euro rose to 69.3 points in May from 67.2 in April. The improvement was fuelled by the retail sector, industry and services. Sentiment among consumers and in the building sector did not change. The report also showed inflation expectations for the year ahead fell again in May to set a new low of -7 points from -2 points in April – the second month in a row of falling forecasts.