Euro zone inflation edges up to 7.0% in April

Headline consumer prices in the eurozone rose somewhat more than expected in April, but underlying costs fell unexpectedly, providing regional rate-setters with a mixed picture of inflation as they prepare to announce their next rate decision this week.

Following a renewed rise in energy prices, the currency’s area consumer price index for the month rose to 7.0% on an annualised basis, according to preliminary Eurostat data. Core inflation, which excludes volatile commodities like as food and gasoline, fell modestly to 5.6%, defying expectations that it would remain constant.

In March, eurozone inflation declined by the greatest since records began, owing to falling energy costs, despite core price rise accelerating to a new high.

The April figures come as the European Central Bank prepares to hold its latest monetary policy meeting on Thursday, with officials widely tipped to raise borrowing costs. However, forecasts differ over whether the ECB will hike rates by 25 basis points or opt for a larger 50 basis point increase.