French Inflation Undershoots Forecasts, Joining Euro-Area Trend

Inflation in France slowed in May as it became the third major euro-area economy to record weaker-than-forecast price growth.

The rate declined to 0.9 percent from 1.4 percent, undershooting the median estimate of 1.1 percent in a Bloomberg survey. Spain and Germany also posted readings this week that fell short of predictions.

Inflation in the 19-nation euro region, due later on Wednesday, is forecast to have cooled to 1.5 percent this month, though that’s based on a survey that was completed before the weak national data. Core inflation, key to the European Central Bank’s debate on the future of its policy, also probably slowed.

The euro-zone inflation numbers are among the last major data to be released before the ECB’s Governing Council gathers next week for its policy meeting. With the economic recovery showing ongoing strength, but sustainable inflation not yet in place, officials have been debating how to manage their route toward an eventual stimulus exit without spooking markets.

— With assistance by Barbara Sladkowska, and Harumi Ichikura

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