Eurozone inflation edges higher in April

Eurozone inflation edged higher in April as energy prices rose, but core inflation unexpectedly eased, according to data released on Tuesday by Eurostat.

Headline consumer price inflation rose to 7% year-over-year from 6.9% in March, in line with consensus estimates.

Meanwhile, core inflation - which excludes food, alcohol, tobacco and energy - ticked down to 5.6% in April from 5.7% the month before. Analysts had been expecting it to be unchanged.

The data showed that energy inflation rose to 2.5% from -0.7% in March, while inflation in food, alcohol and tobacco eased to 13.6% in April from 15.5% the month before.

Riccardo Marcelli Fabiani, economist at Oxford Economics, said: "Despite the uptick in headline inflation, we think the ECB will raise rates by 25bps this Thursday. Policymakers will welcome the first fall in core inflation, while bank lending data show the ongoing tightening is being transmitted into the real economy."

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "These data all but seal the deal for a 25bp hike this week in our view. A nasty upside surprise was needed to push the ECB back towards 50bp, after this morning’s grim-looking bank lending survey. That didn’t happen.

"More generally, the 25bp is now the clear consensus, which we think the ECB will embrace given increasingly ill tidings from leading economic indicators, and evidence that core inflation is no longer rising."

The European Central Bank is due to announce its latest policy decision on Thursday.