Euro zone May inflation edges higher

More expensive energy drove annual inflation in the euro zone up slightly to 1.6 per cent in May and wage growth accelerated in the first quarter, data showed, but inflation pressures remained low.

More expensive energy drove annual inflation in the euro zone up slightly to 1.6 per cent in May and wage growth accelerated in the first quarter, data showed, but inflation pressures remained low.

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Consumer prices in the 16-country bloc rose 0.1 per cent month-on-month and 1.6 per cent year-on-year, European Union statistics office Eurostat said on Wednesday.

"There is no inflationary threat on the horizon," said Clemente de Lucia, economist at BNP Paribas.

What the European Central Bank calls core inflation, which does not include volatile prices of energy and unprocessed food, stood at 0.1 per cent month-on-month and 0.9 per cent year-on-year in May.

The ECB wants to keep inflation just below 2 percent over the medium term.