According to Eurostat’s flash estimate, euro area’s headline inflation accelerated to -0.1% y/y in May from April’s -0.2% y/y. The currency bloc’s core inflation, excluding energy, food, tobacco and alcohol, accelerated to 0.8% y/y. However, energy prices continued to be lower, down 8.1% y/y, but the effect will wane soon. Euroarea’s headline inflation rate is likely to hover around zero for a couple of months before it begins to accelerate towards 1% y/y due to base effects by the end of 2016, said Nordea Bank in a research report.
“We expect the core rate at 1% y/y by December”, added Nordea Bank.
Meanwhile, the euro zone’s seasonally adjusted jobless rate remained stable at 10.2% in April 2016, according to Eurostat. Unemployment dropped 63,000 to 16.42 million persons. Jobless rate is likely to reach 9.75% by the end of 2016, according to Nordea Bank. Meanwhile, loans to non-financial corporations grew slightly to 1.2% y/y in April, moving at the pace of a snail, whereas M1, M2 and M3 growth slowed again.
