Eurozone producer prices slipped more than expected in May as energy costs eased, data showed on Monday, leading some to predict the ECB will hold off on interest rate rises after an expected hike this week. Prices at factory gates in the 17 countries using the euro fell 0.2 percent from April as energy costs dropped 1.1 percent, data from the European Union's statistics office Eurostat showed. Economists in a Reuters poll had forecast a 0.1 percent fall.
"Slowing Eurozone growth, signs that underlying inflationary pressures could be starting to ease suggest the ECB could hold off from acting for some time after Thursday's seemingly inevitable hike," said Howard Archer, economist with IHS Global Insight. "It is looking increasingly possible that the ECB could hold fire after Thursday's probable hike until 2012," he said.
The month-on-month fall helped reduce the annual jump in industrial prices to 6.2 percent compared with a year-on-year rise of 6.7 percent in April. The greatest fall in producer prices for May was recorded in Greece, where they slid 1.4 percent from the previous month, while prices remained stable in Germany and rose by 1.2 percent in Ireland.