Across the 20-country Eurozone, inflation’s rate fell to 6.1 percent in May, down from 7 percent in April and reaching the slowest pace since February 2022 when Russia attacked Ukraine, the European Union’s statistics agency announced.

In a Reuters poll, economists had predicted the rate would drop to 6.3 percent.

The rate of food price increases slowed, energy prices declined, and costs slowed their rate of gain across all product sectors for the first time since the current round of inflation began more than 18 months ago.

Core inflation, which ignores energy and food costs, slowed to 5.3 percent, the lowest since January.

Inflation fell dramatically in France, Germany, Italy, and Spain, the region’s four largest economies, as well as in 14 other countries. The consumer price index rose only in the Netherlands.

While some hoped that the good news would prompt the European Central Bank (ECB) to pause its interest rate hikes, bank president Christine Lagarde was quick to squash those notions.

The ECB has more “ground to cover to bring interest rates to sufficiently restrictive levels” to wrangle inflation down to the bank’s 2-percent target, she said on 1 June at a banking conference in Germany.

“Today, inflation is too high and it is set to remain so for too long,” she added.

“The [rate-hike] hawks will no doubt point to the stickiness of services inflation and the tightness of the labor market,” senior Europe economist Franziska Palmas at Capital Economics wrote in a 1 June note to clients.

The ECB likely will raise its key rate twice more, bringing it to 3.75 percent before pausing, Palmas predicted.

The bank has jacked its base rate from -0.50 percent last July to 3.25 percent now.