Headline annualised consumer inflation eases to 6.9
Edges up to 7.5 minus unprocessed food and fuel
ECB tipped to hike rates by either 25 or 50 bps in May

FRANKFURT, April 19 Reuters Euro zone inflation eased last month but underlying readings remained stubbornly high, Eurostat said on Wednesday, confirming preliminary data that raised worries at the European Central Bank about the persistence of price pressures.

Consumer inflation in the 20 nations sharing the euro eased to 6.9 from 8.5, primarily on a rapid fall in energy costs as natural gas prices keep declining after their surge a year ago on Russia39;s invasion of Ukraine.

But ECB policymakers are now getting worried that high energy costs have seeped into the broader economy and linger in everything from services to wages, making inflation more difficult to tame.

Indeed, excluding unprocessed food and fuel, prices accelerated to 7.5 from 7.4 while an even narrower inflation measure that also strips out alcohol and tobacco picked up to 5.7 from 5.6, in line with preliminary data.

Persistently high core readings is why most ECB policymakers have already said that interest rates will need to keep rising, despite a recordbreaking 350 basis points of hikes since last July.

The debate now appears to be between a 25 basis point and a 50 basis point increase at the May 4 meeting, with April inflation data, due just two days before the decision, likely be the determining factor.

For now, markets are leaning…