Underlying Euro-Area Inflation Pressures Are Building

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May readings for euro-area inflation are due Tuesday, with economists predicting a deceleration in both core and headline figures. “Inflation has been extremely volatile in the last few months, largely due to the timing of Easter holidays,” said Bloomberg Economics’ Maeva Cousin. Still, BE’s supercore measure that focuses on items that have the strongest connection to the spare capacity in the economy shows “underlying price pressures are gradually building and we expect the European Central Bank to focus on these measures when they meet on Thursday.”

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