Headline inflation in the euro zone rises slightly in April, but core price growth slows unexpectedly

The inflation rate in the euro zone rose in April, according to preliminary data released Tuesday, remaining significantly above levels targeted by the European Central Bank.

Headline inflation came in at 7% for last month, according to Eurostat, after it dropped to 6.9% in March. Core inflation, which excludes food and energy prices, stood at 5.6% in April — from 5.7% in March.

The latest figures come just days before the ECB is due to announce a new monetary policy decision. Market players have been debating whether the central bank will raise rates by 50 or 25 basis points.

The central bank embarked on its current hiking path in July 2022, when it brought its main rate from -0.5% to zero. The ECB’s main rate is currently at 3%.

Despite the consistent rate increases, inflation remains above the ECB’s target of 2%. Estimates published last week by the International Monetary Fund suggested that headline inflation will not come close to the ECB’s target until 2025.

“Further tightening is required, and when the terminal rate has been reached, that terminal rate needs to be maintained for longer, because core inflation is … high, and it’s very persistent. And there’s nothing worse than pausing an inflation fighting effort too early, or abandoning it too early because if you need to do it a second time, the costs to the economy are so much larger,” Alfred Kammer, director of the European department at the IMF, told CNBC Friday.

This is a breaking news story, please check back later for more.