Inflation in the eurozone stayed marginally above the European Central Bank’s target in April, a fresh increase in services prices keeping the annual rate stuck at 2.2 percent.
Data published by Eurostat on Friday showed prices rose 0.6 percent on the month, with strong services inflation more than offsetting declines in energy prices, reflecting the slump in oil markets after U.S. President Donald Trump unleashed his trade tariff offensive.
There were few other immediate signs of the U.S. trade strategy apparent in the figures, although officials expect it to have a disinflationary effect in the near term, due to heightened uncertainty holding back business and consumer spending.
The figures are a modest disappointment, as analysts had expected eurozone inflation to slow to 2.1 percent. However, the numbers are unlikely to cause any dramatic change in thinking, with a solid consensus at the ECB expecting it to fall back to the 2 percent target later this year. That’s due in part to the strength of the euro, which has risen nearly 10 percent against the dollar so far this year.
Earlier on Friday, business surveys published by S&P Global suggested activity in the eurozone’s manufacturing sector continued to fall in April, albeit at the slowest rate in nearly three years. Hamburg Commercial Bank chief economist Cyrus de la Rubia said the situation “remains fragile,” owing to the threat of more intense competition from Chinese manufacturers who are now struggling to sell in the U.S.
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