Eurozone Inflation Unlikely to Rise Sharply Further, Analyst Says

Eurozone inflation is unlikely to increase significantly further, according to a report by Capital Economics analyst Jack Allen-Reynolds. According to Jin10, Allen-Reynolds said May’s inflation was driven by fuel prices, which he expected to ease in the near term. He added that if oil and natural gas shipments through the Strait of Hormuz resume in the coming months, energy inflation was unlikely to rise further. He said this would also reduce the risk of second-round inflation effects. Allen-Reynolds said food and services price growth was still expected to pick up in the second half of the year, but he described the overall impact as likely to be small. He said Capital Economics therefore expected inflation to rise only slightly in the second half of the year.