Eurostat confirms April inflation data; ECB on track for new rate cut

Brussels – No surprises: In April, inflation in the euro area was at 2.2 percent, stable compared to March, as already forecasted. Eurostat publishes the final data, which should be read carefully. The inflation level mainly reflects a decline in energy costs (-3.6 percent, down from -1 percent in March), while the other main items — ‘services’ and ‘general food’ — rose (+0.5 percentage points and +0.1 percentage points, respectively), while ‘non-energy industrial goods’ remains stable.

The figure, however, confirms a general level of inflation close to the ECB reference target of 2 percent. The European Central Bank is expected to cut rates again at the Governing Council meeting scheduled for June 5. In deciding, the Eurotower board may also consider the scenarios produced by the European Commission’s Spring Economic Forecast that points to a return of inflation to the ECB target.

Analysts expect an eventual adjustment in line with those seen so far, thus a 0.25 percentage point cut. There is an intention to ease rates, but not at a sustained pace. Therefore, the ECB would opt for a data-driven approach and time-by-time decision-making, as repeatedly stated, but cautious. The uncertainties generated by the risk of trade wars and US tariffs, which disturb the Frankfurt institution, also dictate choices.