European Central Bank on track for June rate cut as key inflation metric eases

Services prices decelerate in April

Headline inflation in the eurozone remained stable in April at an annual rate of 2.4%, but a deceleration in services prices has kept a June interest rate cut by European Central Bank (ECB) in play.

According to a flash estimate by Eurostat, services inflation, a key watcher for the ECB, eased to 3.7% from 4% in March after five months of no change. Core inflation, which excludes energy, food, alcohol and tobacco, fell to 2.7% in April from 2.9% the prior month. The year-on-year contribution of energy prices as a component of inflation continued to decrease, registering at -0.6% compared to -1.8% in March. Separate gross domestic product figures also released today (30 April) pointed to an improving picture for the eurozone in the first three months of the year, with quarter-on-q...