Inflation in the 15-member eurozone surged to a record 3.6 per cent in May, data released Friday showed, ruling out an early move by the European Central Bank (ECB) to cut interest rates, DPA reported. The figures, published by the European Union's statistics office, showed soaring food and oil prices driving up inflation in the currency bloc from 3.3 per cent in April at the same time as consumer and business confidence fell. Economists had expected May inflation to come in at 3.5 per cent with consumer prices now at their highest level since records began in 1997. Either way, the May figure pushed inflation further away from the target set by the ECB of inflation coming in close to but just below 2 per cent. The release of the May inflation data also comes ahead of next week's monthly meeting of the ECB when the bank's 21-head rate-setting council is widely expected to leave borrowing costs on hold at 4 per cent for the 12th month in a row. However, highlighting the growing dilemma facing the ECB, the pickup in inflation coincides with signs of slowing growth both in the world economy and the eurozone. But in the meantime, bank chief Jean-Claude Trichet underscored the ECB's hawkish stance on inflation, warning ahead of the release of the inflation data of the growing threat posed by surging consumer prices in the 15-member currency bloc.
