(Bloomberg) -- Spanish inflation quickened for a third month as the rollback of government support to contain energy crisis continued to push prices higher.

May’s reading came in at 3.8% from a year ago, data published Thursday showed. That’s up from 3.4% in April and is a little higher than the 3.7% median estimate in a Bloomberg survey of economists.

Stripping out energy and some food costs, core inflation picked up to 3% from 2.9%.

The numbers follow a similar acceleration in Germany, where last year’s introduction of a cheap public-transport ticket drove price growth to 2.8% this month. Data for the 20-nation euro zone as a whole, due Friday, are also expected to reveal an uptick, to 2.5%.

Those figures are unlikely to shift the European Central Bank’s plan to lower its deposit rate next week from the current record high of 4%. But while policymakers see disinflation resuming over the course of 2024 and 2025, they say they’ll be cautious in sanctioning further cuts.

What Bloomberg Economics Says...

“The rise in Spain’s harmonized CPI in May shouldn’t be cause for concern. The increase is mostly explained by unfavorable base effects from energy and there’s likely to be better news on the core measure. Underlying price gains have been on a smoother downward trend than the headline measure and we expect them to fall below 2% later this year – evidence that any risk of persistent inflation has all but faded.”

—Ana Andrade, economist. Click here for full REACT

Markets are fully pricing two reductions this year, with a one-in-three chance of a third. ECB Chief Economist Philip Lane said last week that monetary policy will need to remain restrictive for the rest of 2024.

In Spain, faster economic expansion than in most of the euro area could underpin inflation, though the government has had to shelve plans to pass a budget for 2024 and a political stalemate in parliament has limited Prime Minister Pedro Sanchez’s ability to push through laws.

Bloomberg Economics’ Nowcast for June inflation suggests a slowdown to 3.5%, taking the latest data into account. The model correctly predicted May’s outcome.

--With assistance from Ainhoa Goyeneche, Joel Rinneby, Bhargavi Sakthivel (Economist) and Andrej Sokol (Economist).

(Updates with Bloomberg Economics.)

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