Europe has succeeded in bringing inflation under control after a surge driven by the end of the Covid-19 pandemic and Russia’s invasion of Ukraine, the head of France’s central bank said.

Eurozone inflation fell to 1.9% in May, below forecasts, boosting expectations of an ECB rate cut on Thursday. Core inflation also eased to 2.4%. The euro slipped and bond yields fell as markets priced in a 25bp rate cut to 2.

With inflation easing and growth stagnating, the central bank delivers its eighth consecutive cut amid rising trade tensions.