Headache for ECB as eurozone May inflation rises more than expected

(Sharecast News) - Eurozone inflation rose in May, according to official data published on Friday, as prices stubbornly refused to shift and indicating a tougher path ahead for the European Central Bank's monetary policy. The annual inflation rate across the eurozone is expected to be 2.6% in May, statistics body Eurostat said in a flash estimate, up from 2.4% in April and March, driven by rising prices in the services sector.

Economists had expected a smaller rise in inflation, to 2.5%, as investors expect an interest rate cut by the ECB next week.

Underlying inflation, which excludes volatile items such as food, energy, alcohol and tobacco came in at 2.9% from 2.7% in April.

Services inflation rose to 4.1% in May, up from 3.7% in April, while food, alcohol & tobacco inflation slowed to 2.6% from 2.8% in April.

Reporting by Frank Prenesti for Sharecast.com