Euro-zone inflation hits 8.10%: ‘we think they’ll normalise rapidly’

A continued increase in energy prices saw inflation in the euro-zone hitting a new record of 8.10% in May, the preliminary data from Eurostat revealed on Tuesday.

Expectations were for an increase to 7.80%

In comparison, economists had forecast the Consumer Prices Index (CPI) to come in at 7.80%. The reading also marked a significant month-over-month increase from 7.40% in April.  

A day earlier, EU leaders reiterated their commitment to banning 90% of Russian energy by the end of 2022 – a move that will likely exacerbate the inflationary pressures in the euro-zone. In her recent blog post, ECB President Christine Lagarde wrote:

Goldman Sachs forecasts rapid rate increase

Jari Stehn – the Chief European Economist at Goldman Sachs now forecasts the European Central Bank to increase its key rate by 25 bps in each of its meeting through June 2023. In a CNBC interview, he said:

The ECB is scheduled for its next meeting on June 9^th. The Euronext N.V. is roughly flat on Tuesday.