Eurozone inflation drops to 2.7%

Eurozone inflation fell to a lower-than-expected 2.7% in May.

Despite inflation declining from 2.8% in April to 2.7% in May, there was large divergence between various countries - whilst Spain tops the league with a figure of 20.7%, inflation in the Netherlands and Austria stands at just 4.2%. Ireland, fresh from an EU/IMF bailout, has an inflation rate of 14.7%. Following release of the statistics, the euro was up against both the dollar and sterling. The fall in inflation will vindicate the European Central Bank's (ECB) decision to hike rates in April from 1% to 1.25% - the first rise in almost three years - in a bid to stem rising prices. ...