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UPDATE: Eurozone inflation rises faster than expected

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UPDATE: Eurozone inflation rises faster than expected

Annual inflation in the eurozone rose faster than expected in May, further complicating the calculus for the European Central Bank as it considers when to end quantitative easing.

Headline inflation accelerated to 1.9% in May from 1.2% in April, according to a flash estimate from Eurostat, beating analyst expectations of a 1.6% rise. The ECB targets inflation rates "below, but close to, 2%." Core inflation, which excludes energy, food, alcohol and tobacco, advanced to 1.1% from 0.7% a month ago.

The eurozone data came on the heels of stronger inflation rates in Germany, Spain and France, all of which surpassed the ECB's inflation target. The ECB's QE program is due to end in September, although it is widely expected to extend it until the end of the year.

"Slowly rising wage growth looks set to push core inflation gradually higher this year and recent rises in oil prices are likely to push the headline rate above 2%. As a result, we continue to think that the ECB will announce in July that it will end QE this year," Capital Economics' European economist Stephen Brown said in a note. "We see the first interest rate increase coming in September 2019."

But Italian political turmoil, weak economic data and looming U.S. tariffs on European steel and aluminum could yet stay the ECB's hand, according to ING senior economist Bert Colijn.

"The ECB ... now has to decide whether it will provide certainty straight away by announcing an extension to [quantitative easing] or take a 'wait and see' approach at the June meeting," Colijn added. "Then it could just hint at an extension while taking another six weeks to see how the political situation in Italy and the trade conflict with the U.S. play out, and take in more economic data."

Energy prices rose 6.1% in May, more than doubling April's reading of 2.6%. Food, alcohol and tobacco prices jumped 2.6% and services increased 1.6%.

The euro was up 0.28% as of 5:54 a.m. ET.

Meanwhile, the euro area's unemployment rate declined to 8.5% in April from a revised 8.6% in March and from 9.2% a year ago, a separate release showed.