Eurozone inflation accelerated in May, reinforcing concerns that underlying price pressures remain persistent despite the European Central Bank’s easing efforts. Headline CPI rose 3.2% year-over-year, matching expectations and increasing from 3.0% in April, while monthly inflation slowed sharply to 0.1% from 1.0% previously.

More importantly for policymakers, core inflation—which excludes volatile food and energy prices—climbed to 2.5% year-over-year, exceeding expectations of 2.4% and accelerating from 2.2% in April. The stronger-than-expected core reading suggests that underlying inflationary pressures remain more stubborn than anticipated.