FRANKFURT (Reuters) - An unexpected drop in euro zone core inflation is likely due to temporary factors and overall price growth is still seen hovering around 1.5 percent in the coming months, European Central Bank chief economist Peter Praet said on Monday.
“This negative surprise in core inflation is mainly attributable to a decrease in services inflation, which is likely to be related to developments in volatile items, also reflecting the timing of Easter this year,” Praet said in Geneva.
“On the basis of current futures prices for oil, inflation is likely to hover around 1.5 percent in the coming months,” Praet said, reaffirming the ECB’s projection for price growth even after inflation surprised on the downside last month.
Headline inflation slipped to an annual 1.2 percent in April from 1.3 percent while price growth excluding volatile food and energy, the ECB’s preferred measure, slowed to 1.1 percent from 1.3 percent.
Reporting by Balazs Koranyi; Editing by Francesco Canepa