Eurozone inflation falls as unemployment stays flat

BBC:

Inflation in the countries that share the European single currency fell to 2.7% in May, according to the European Union statistics office.

The preliminary estimate is down from 2.8% in April and is lower than expected.

Unemployment in the euro area remained unchanged at 9.9% in April, though there were big differences between states.

The euro fell on the news, which may limit further rises in interest rates. The European Central Bank (ECB) wants to keep inflation just below 2% over the medium term. The ECB raised rates in April to 1.25% to limit rising prices.

However, economists predicted that inflation would continue to rise, despite a recent drop in the price of some commodities, including oil. "The ongoing moderation in economic activity will probably ease some of these pressures, but will not change the overall picture," said Eoin O'Callaghan, an economist at BNP Paribas.

If inflation continues to rise, economists think further rate rises are likely.