Germany's lower-than-expected inflation rate may not be enough to prompt the European Central Bank to raise interest rates this month.

In April, the acceleration of inflation in Germany was lower than expected, supporting the European Central Bank's decision to postpone raising interest rates due to the Iran war. Consumer prices in April rose 2.9% year-on-year, higher than the 2.8% increase in March, but lower than the 3.1% median estimate obtained from a Bloomberg survey. Earlier regional data showed that package tour prices fell, offsetting the impact of rising fuel and heating costs. This contrasts with Spain, where inflation unexpectedly accelerated to 3.5%. Data for France and Italy will be released on Thursday, along with eurozone inflation data from the 21-member countries, which is expected to show a inflation rate of 3%, the fastest since 2023. This report is unlikely to provide a conclusion for European Central Bank officials meeting in Frankfurt this week. At that time, ECB officials will discuss whether the two-month war in the Middle East has had a sufficient impact on inflation to warrant a monetary policy response.