German inflation slows more than expected in May, below ECB target

BERLIN (Reuters) - German consumer inflation eased more than expected in May to fall below the European Central Bank's price stability target of just under 2 percent, data showed on Tuesday, taking some pressure off the ECB to wind down its monetary stimulus soon.

German consumer prices, harmonised to compare with other European countries (HICP), rose by 1.4 percent on the year after inflation accelerated to 2.0 percent in the previous month, the Federal Statistics Office said.

The reading was the lowest since November and came in below the Reuters consensus forecast of 1.6 percent.

On the month, German consumer prices fell 0.2 percent on an EU-harmonised basis, the data showed.

A breakdown of non-harmonised data showed energy costs rose less sharply given the fall in oil prices while food price inflation increased.

Services inflation also slowed, reflecting cheaper prices for leisure and package holidays as special factors related to the Easter holidays in April were reversed in May.

With euro zone growth on its best run since the bloc's crisis took hold a decade ago, pressure from Germany and other countries has been mounting on the ECB to start planning an exit from its policy of aggressive bond purchases and sub-zero rates.

However, ECB President Mario Draghi said on Monday that euro zone growth may be improving but inflation remained subdued and still required substantial stimulus, tempering expectations for the central bank's June 8 policy meeting.

(Reporting by Michael Nienaber; Editing by Paul Carrel)