By Maria Martinez
BERLIN, May 29 (Reuters) – German inflation slowed in May but core inflation accelerated, showing that cost pressures due to the Iran conflict have started to spread across the broader economy.
Inflation fell to 2.7% from 2.9% in the previous month, preliminary data from the national statistics office showed on Friday.
Analysts polled by Reuters had forecast the EU-harmonised consumer price index to come in at 2.8%.
Core inflation, which excludes volatile food and energy prices, rose to 2.5% in May from 2.3% in April.
The German data comes ahead of the euro zone inflation release on Tuesday. Inflation in the bloc is expected to come in at 3.3% in May, up from 3.0% in the previous month, according to economists polled by Reuters.
The European Central Bank kept interest rates on hold at its meeting in April, but a further increase in inflation is making it very likely that the bank will follow up earlier warnings with policy action next month.
(Reporting by Ludwig Burger and Madeline Chambers, Writing by Maria Martinez, Editing by Friederike Heine)
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