Eurozone Inflation Hits 3.2% in May, Cementing ECB Rate Hike on June 11

Eurozone consumer prices rose 3.2% in May from a year earlier, marking the highest inflation since 2023 and reinforcing expectations that the European Central Bank will raise interest rates at its June 11 meeting. The acceleration, fueled by energy and services costs, dashes hopes that price pressures are easing sustainably. Financial markets now view a quarter-point rate hike next week as a certainty, with the deposit rate set to climb further from its current 3.75%. The uptick in inflation, up from 2.8% in April, suggests the ECB’s tightening cycle may extend into the summer as policymakers seek to quell stubborn services-sector inflation and prevent second-round effects from wage growth.