UK inflation fell to 2.8% in April from 3.3%, below the 3.0% forecast and the lowest since March 2025, as the Ofgem energy cap offset an Iran-war fuel surge. Germany’s Merz doubled down against a “Draghi-style” eurobond push, clashing with France, Spain, and Greece ahead of the EU 2028-2034 budget. France’s debt strain deepened with 10-year OAT yields near 3.99%. Eurozone April inflation jumped to 3.0% on a 10.8% energy spike. Italy and Spain navigate widening spreads amid US troop-withdrawal threats over their Iran-war stance. European equities steadied as Iran de-escalation hopes offset elevated yields. Today’s Europe intelligence brief tracks six country decisions converging on the Wednesday tape.
01 · United Kingdom — CPI Falls to 2.8% in April, Below Forecast and Lowest Since March 2025
UK consumer price inflation fell to 2.8% in the 12 months to April 2026, the Office for National Statistics reported Wednesday May 20, down from 3.3% in March and below the 3.0% market expectation — the lowest reading since March last year. The moderation was driven mainly by a sharp slowdown in housing and household-services inflation to 1.4% from 5.3%, following the April 1 Ofgem energy price cap.
