Eurozone inflation beats expectations in April

Eurozone inflation beat expectations last month, which will offer mild relief for the European Central Bank (ECB).

Inflation rose from 1.4 per cent in March to 1.7 per cent in April, beating forecasts for 1.6 per cent, according to Eurostat.

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However, despite the solid April figures the ECB expects inflation to fall this year, and miss its target of just below two per cent for the next three years.

Energy had the highest inflation rate in April at 5.4 per cent, followed by services which rose from 1.1 per cent in March to 1.9 per cent.

Food, alcohol and tobacco inflation fell to 1.5 per cent from 1.8 per cent, and non energy industrial goods rose from 0.1 per cent to 0.2 per cent.

Underlying prices excluding food and energy rose from one per cent to 1.3 per in April, hitting the highest rate since October.

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“We don’t think that the ECB will read too much into this print,” Morgan Stanley said in a note to clients, Reuters reported.

“As before, it will probably want to look through the Easter-related volatility in the core metric, which remains low when stripping out these effects.”