Analyst: Eurozone inflation rising ahead of ECB meeting in line with comments

Validus Risk Management analyst Harry Woolman stated in a report that the rise in inflation in the Eurozone in May almost confirms that the European Central Bank will raise interest rates next week. He said that in the past two weeks, the narrative supporting a rate hike has grown due to inflation pressures gradually spreading as a result of energy price shocks. Woolman said that the significant slowdown in non-essential consumer spending and tightening credit conditions led to last month's purchasing managers index data, which showed economic activity falling into contraction territory for the first time since 2024. "Therefore, as concerns about stagflation intensify and the second-round effects of the conflict become more apparent, the central bank is expected to face medium-term challenges."