Private sector activity in the Eurozone accelerated in May as prices charged by businesses slowed, according to the Purchasing Managers Index (PMI) published by S&P Global on Thursday.
The Index rose from 51.7 in April to 52.3 in May, its highest level in a year. This was the zone's third monthly increase in a row.
A figure above 50 signifies growth, while any figure below points towards a contraction.
Cyrus de la Rubia, economist for S&P Global’s partner, the Hamburg Commercial Bank (HCOB), views the price data as encouraging news for the European Central Bank (ECB).
The slowdown in price inflation, both for expenses and charges by businesses, compared to April, should reinforce the ECB’s position, de la Rubia said in relation to a probable decision to lower the base rate at the bank's meeting on 6 June.
However, he believes that the moderation in inflation is not likely to be substantial enough to prompt the ECB to announce further rate cuts following the June decision.
