Consumer prices were firm in May. A provisional 0.4 percent monthly rise was large enough to lift the annual inflation rate by 0.4 percentage points to 2.0 percent, its highest reading since August 2012.
The flash HICP was equally robust, also climbing 0.4 percent versus April to stand 2.3 percent higher on the year, a hefty 0.5 percentage point gain from last time.
However, most of the work was done by the more volatile categories. Hence, annual inflation in energy jumped from 6.3 percent to fully 10.0 percent while fresh food rose from 3.9 percent to 4.9 percent. More importantly, the rate in services was only flat at 1.4 percent while deflation in manufacturing (0.1 percent after 0.2 percent) was minimally less marked.
Consequently, core inflation was probably little changed this month. Still, the jump in the headline measure could provide a boost to inflation expectations which, in turn, could help to promote a higher underlying rate further down the road.