Inflation in the euro zone accelerated to an estimated 3.2 per cent in May, driven largely by a surge in energy prices, according to flash data released on Tuesday.

The figure matched economists’ expectations in a Reuters poll and is likely to reinforce market expectations that the European Central Bank will raise interest rates at its policy meeting next week.

Energy recorded the strongest annual price increase among major inflation components, rising 10.9 per cent in May, slightly higher than the 10.8 per cent growth recorded in April.

Services inflation also picked up, climbing to 3.5 per cent from 3 per cent in the previous month.

However, inflation for food, alcohol and tobacco eased to 2 per cent, down from 2.4 per cent in April.

Price pressures varied across the euro area. Germany, the bloc’s largest economy, saw annual inflation moderate to 2.7 per cent in May from 2.9 per cent in April.

In contrast, inflation in Greece and Lithuania exceeded 5 per cent, while France recorded an increase to 2.8 per cent from 2.5 per cent a month earlier.

The latest data underscore persistent inflationary pressures across the euro zone, with price growth remaining well above the European Central Bank’s 2 per cent target.

Elevated oil and gas prices following the U.S.-Iran conflict have continued to fuel inflation across the region.

Euro zone inflation had already risen to 3 per cent in April from 2.6 per cent in March.

Before the outbreak of the conflict involving Iran, inflation in the currency bloc had briefly fallen below the ECB’s target threshold.