Prices charged by factories in the 20 countries that share the euro currency fell 1.5% in May compared with the same month last year, according to data from the European Union’s statistics agency. That’s the first time producer prices — which feed into prices paid by consumers — have notched a year-on-year decline since December 2020. The drop was driven by a steep 13.3% annual fall in producer prices in the energy sector, the data showed.
The ECB has been trying to take the heat out of price increases over the past year by jacking up interest rates. In June, the central bank hiked benchmark borrowing costs to 3.5%, their highest level in over 22 years. Producers, however, have less to celebrate. According to June survey data published Tuesday, factory output in the euro area recorded its steepest fall since October.