Eurozone inflation ticked back up in May

PRICES in the euro area rose by 1.6 per cent between June 2012 and last month, according to the statistical agency of the European Union, Eurostat.

The rise is higher than that seen for the previous two months. The harmonised measure of consumer price inflation (known as HICP) in the year to May was 1.4 per cent, and was 1.2 per cent in April.

Most countries saw a rise in their rate, as fears of deflation across the currency union appear to have been misplaced, at least for now.

Greece’s rate of inflation remained the lowest in the euro area, with deflation of 0.3 per cent. Estonia had the highest rate, at 4.1 per cent. Only Finland, Slovakia, Austria and Malta saw lower rates in June than May.

However, the producer price index for the Eurozone saw a small contraction over the same period, falling by 0.1 per cent.

Energy prices drove the fall, dropping by 1.8 per cent. Excluding the effect of energy, prices for factories increased by 0.5 per cent over the year.