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Euro zone inflation leaps to 1.9 per cent

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BRUSSELS: Inflation in the euro zone leaped to the ECB’s target in May, data showed on Thursday, fuelled by a huge increase in oil prices as the US decided to pull out of a nuclear deal with Iran.


The EU’s statistics authority, Eurostat, said inflation in the euro zone jumped to 1.9 per cent in May, a massive jump from the 1.2 per cent recorded in April.


That puts inflation right at the European Central Bank’s target of close to, but just below 2.0 per cent.


Analysts believe increased inflation will heap pressure on the ECB to scale back its massive stimulus programme that has helped keep government borrowing prices at super low levels.


This would be especially sensitive in heavily-indebted Italy, which is hit by a political crisis and benefits greatly from the ECB bond-buying programme. — Reuters


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