Euro area producer prices fall more than expected in May

Factory gate prices in the euro area slipped more than expected in May, adding to recent weakness.

Producer prices in the single currency bloc retreated by 0.4% month-on-month, following flat readings for February and April and a 0.3% drop in March, according to Eurostat.

On an annual basis, price gains slowed from a 4.3% pace in April to a 3.3% clip for May.

Economists had forecast a dip of 0.2% on the month and a 3.5% pace of year-on-year gains in May.

Excluding energy, factory gate prices advanced at a 2.4% clip year-on-year, down from the 2.6% rate of advance seen in the month before.

When compared to April, prices for intermediate goods declined by 0.1%, while those for energy slumped by 1.3%.

Prices for capital goods rose by 0.1%, while those for durable consumer goods were flat and those for non-durable consumer goods were 0.2% higher.

Amongst the main economies, prices in France were especially weak, slipping by 0.6% over the month while in the Netherlands they fell by 1.0%.

Further afield, in Greece producer prices dropped by 1.9% on the month, pushing the year-on-year rate of factory gate inflation back to its end-2016 level of 3.0%.

In the UK, producer prices retreated by 0.8% on the month.