Inflation in the 15-member eurozone jumped to 3.5 per cent in May, data to be released Friday is expected to show, ruling out an early move by the European Central Bank to cut interest rates, according to dpa. Analysts expect surging food and oil prices will result in the European Union's statistics office, saying May inflation in the economy built around the euro rose from 3.3 per cent in April. The latest inflation data follows figures released Thursday showing a bigger-than-forecast pickup in credit growth in the currency bloc with the broad M3 measure of the money supply accelerating to 10.6 per cent from a revised growth rate of 10.1 per cent in March. The ECB sees the money supply data as a key determinate of future inflationary trends in the currency bloc. Most economists believe that eurozone inflation has still not peaked and could climb to as high as 4.0 per cent in the coming months. However, economists are more divided on the prospects for interest rates in the eurozone with some now speculating that signs of growing inflation could even result in the ECB hiking the cost of money before the end of the year. This is despite evidence that the eurozone economy is likely to slow as the year unfolds with the risks posed by rising inflation presenting the latest threat to global economic growth. Either way, a rise in May inflation will push consumer prices further away from the close to but just below 2-per-cent annual inflation target set by the ECB. The Frankfurt-based ECB continues to resist following the moves by the world's other leading central banks, notably the US Federal Reserve, towards lowering borrowing costs. Instead, the ECB has continued to talk tough on the threat posed by renewed inflationary pressures. Since the ECB's last meeting earlier this month, oil has hit a record high of 135.09 dollars a barrel. Eurozone interest rates have been on hold at four per cent since June last year with the ECB sitting tight on monetary policy despite the turmoil that emerged in financial markets as a result of the US mortgage market crisis. The prospects of another rise in eurozone inflation also came in the wake of German data released Wednesday showing inflation in Europe's biggest economy rising from 2.6 per cent in April to 3.0 per cent in May. Economists had predicted a rise in German May inflation to 2.8 per cent.
