Germany's headline CPI inflation slowed to 2.6% YoY in May, down from 2.9% in April, while consumer prices fell 0.2% MoM on a provisional basis.

• Core inflation, which excludes food and energy, edged up to 2.5% YoY from 2.3% in April, suggesting underlying price pressures remain relatively firm despite the moderation in headline inflation.
• Energy inflation slowed sharply to 6.6% YoY from 10.1% in April, providing the main source of disinflation during the month.
• Food price inflation eased to 0.4% YoY from 1.2%, continuing a broader cooling trend in food costs.
• Services inflation accelerated to 3.1% YoY from 2.8%, remaining the strongest major component and highlighting persistent domestic price pressures.
• Goods inflation moderated to 2.2% YoY from 2.9% in April, while core goods and services combined pushed core CPI slightly higher.
• The harmonized CPI (HICP), the measure used for ECB comparisons, slowed to 2.7% YoY from 2.9%, while declining 0.1% MoM.
• The May report points to easing headline inflation driven by softer energy and food prices, although firmer services inflation kept underlying price pressures elevated.