European Economic Perspectives "European inflation monthly: May preview"...

Research evidence excerpt

European Economic Perspectives "European inflation monthly: May preview"...

Global Research

26 May 2026ab

European Economic Perspectives Economics

Europe including UKEuropean inflation monthly: May preview

Anna Titareva

Economist

May inflation preview across Europe anna.titareva@ubs.com

+44-20-7568 5083

Inflation likely to rise in the Eurozone, UK and Sweden, while staying stable in

Switzerland. Franziska Fischer

franziska.fischer@ubs.com

Eurozone HICP: Headline and core +0.2pp to 3.2% and 2.4%, respectively +41-44-239 2054

We forecast headline inflation to rise again in May +0.2pp to 3.2% y/y (out on 2 June),

Reinhard Cluse

which we expect to be the peak. In contrast to March and April, when energy prices

showed big %m/m increases, we expect fuel prices to decline slightly in May (-0.7% m/ reinhard.cluse@ubs.com

m), largely due to a temporary fuel tax cut in Germany. Despite the likely monthly +44-20-7568 6722

decline, annual energy inflation should rise further +0.6pp to 11.4% y/y, contributing to

Felix Huefner

an increase in headline. However, the main driver behind the increase in headline is likely Economist

to be core inflation, which we expect to rise 0.2pp to 2.4% y/y, solely driven by a 0.3pp felix.huefner@ubs.com

increase in services inflation to 3.3% y/y. This reflects the reversal of the Easter effect, +49-69-1369 8280

which raised March inflation (due to its earlier timing compared to last year) and

dampened April inflation. Importantly, we expect services inflation to ease again in June

to 3%, where we foresee services inflation hovering until the end of the year. Goods

inflation is likely to remain unchanged at 0.8% y/y. Outside of core, we project food

inflation to ease 0.1pp to 2.3% y/y. At the country level, we expect inflation in Germany