1 of 2 | ECB President Christine Lagarde said she'd let the data drive decisions on lending rates. Data published Wednesday showed a slight increase in consumer inflation for the economies that use the euro currency. File photo by Kevin Dietsch/UPI | License Photo
May 17 (UPI) -- Inflation for the nations that use the euro currency increased to 7% over the 12-month period ending in April, a slight increase from March levels, regional data published Wednesday show.
Eurostat, the region's statistics office, reported that euro-area inflation was 0.1% higher in April than the March level of 6.9% on an annual basis. Results varied throughout the region. Luxembourg posted a reading of 2.7%, while inflation in Hungary was 24.5% annually to April.
For just the core members of the European Union, meanwhile, annual inflation declined, from 8.3% over the 12-month period to March to 8.1% in April.
"Compared with March, annual inflation fell in twenty-two member states and rose in five," Eurostat added.
As with the previous reading, most of the euro-area inflation came from food, alcohol and tobacco, which increased by 2.75 percentage points. On a monthly basis, the services sector accounted for the bulk of the increase in consumer prices at 1.2% from March to April.
Actual data was better than consumers had expected. A survey published Thursday on consumer expectations on inflation from the European Central Bank showed a perceived level of 9.9% to March, higher than Wednesday's data showed.
"Uncertainty about inflation expectations 12 months ahead reached its highest level since the start of the survey in April 2020," the ECB found. "Consumers expected their nominal income to increase by 1.3% over the next 12 months, up from 1.2% in February."
Like its peers, the ECB in early May hiked three of its key interest rates by 25 basis points in an effort to deal with ongoing high inflation pressures.
"Headline inflation has declined over recent months, but underlying price pressures remain strong," the ECB said in a statement. "At the same time, the past rate increases are being transmitted forcefully to euro area financing and monetary conditions, while the lags and strength of transmission to the real economy remain uncertain."
Going forward, ECB President Christine Lagarde said decisions on rates will be based on assessments of the inflation outlook in light of the incoming economic data, the dynamics of underlying inflation and the strength of monetary policy transmission.
The ECB added that it will continue to reduce its asset purchase program "at a measured and predictable pace." The ECB's Governing Council expects to discontinue reinvestments in that program by July.