The rate at which producer prices have been increasing in the 17 countries that share the euro eased during the first month of the second quarter, although upwards pressure on consumer prices remains, according to The Wall Street Journal. On Monday, the European Union reported that industrial producer prices in the eurozone, excluding construction, added 6.7% in April year-over-year, falling back from the 6.8% annual increase seen in March, which was the highest level in two-and-a-half years. Prices were up 0.9% in April from the previous month after a 0.8% gain the month before.
The data is likely to ease concerns among policymakers at the European Central Bank to increase interest rates to contain inflation, although economists’ expectations for fiscal tightening indicate that a move happen in the coming months. Howard Archer of IHS Global Insight said, “The further spike up in eurozone producer prices in April reinforces the belief that the ECB will signal an interest rate hike from 1.25% to 1.50% in July.” Excluding energy, producer prices added 4.4% year-over-year.