Euro zone inflation hits 15 month low

Inflation across the 17 countries that use the euro fell by more than anticipated in May, a development that will likely add pressure on the European Central Bank to cut interest rates next week. In its first estimate, Eurostat, the European Union’s statistics office, said annual consumer price increases slowed to a 15-month low of 2.4 per cent in May from 2.6 per cent the previous month. The expectation in the markets was for a more modest decline to 2.5 per cent. Though inflation is still running above the ECB’s target of keeping price increases below 2 per cent, the central bank is under pressure to lower its main benchmark rate from the current 1 per cent to help the ailing euro zone economy.