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Euro inflation bang on ECB target

The annual rate of inflation in the euro zone eased to 1.9% in May from 2.1% in April, according to provisional figures from the EU's Eurostat statistics agency.

The figure was slightly lower than a 2% initial estimate and marks a sharp fall from the 2.5% registered in May 2004.

The data for May was also spot on the European Central Bank's preferred inflation ceiling of close to but just under 2%. Inflation across the 25-nation EU was also 1.9% in May compared with 2.1% in April.

In the euro zone, growth in prices for housing, alcohol and tobacco and education costs saw the biggest increases in May while communication costs fell and clothing, recreation and culture prices showed weak growth.