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Eurozone inflation rebounded in April, with the annual rate climbing to 1.9 per cent after taking a surprisingly large tumble in the previous month.
Annual consumer price rises are now back to the European Central Bank’s target of just under 2 per cent having slumped to 1.5 per cent in March, according to a first estimate from Eurostat. The reading was above an average forecast of 1.8 per cent.
Within the eurozone, German inflation has hit 2 per cent while France’s rate was stable at 1.4 per cent this month. The later timing of Easter has pushed up the April inflation basket, with higher travel and leisure costs.
Encouragingly for policymakers, a core measure of inflation which strips out changes for oil and food prices also shot up, rising from 0.7 per cent in March to 1.2 per cent. That is its highest reading since 2013.
A separate poll of professional economic forecasts compiled by the ECB showed economists expect inflation to hit 1.8 per cent “in the longer term”, signalling that this is the level they think is consistent with the central bank’s inflation target.
The ECB poll, compiled once a quarter, also showed economists have raised their expectations for inflation over the coming years.
The previous poll showed economists had forecast inflation to hit 1.4 per cent this year, 1.5 per cent in 2018 and 1.6 per cent in 2019. They now expect inflation of 1.6 per cent, 1.5 per cent and 1.7 per cent in the three years ahead.
Economists now predict a slightly stronger expansion this year, revising their growth forecasts from 1.5 per cent to 1.7 per cent.