Underlying inflation in the euro zone dipped by more than expected, though the retreat is unlikely to stop the European Central Bank from raising interest rates further.

Consumer prices excluding items like fuel and food advanced by 5.3% from a year earlier in May — down from April’s 5.6% increase and less than the 5.5% median estimate in a Bloomberg survey of economists.

The headline gauge moderated more markedly, easing to 6.1% — its lowest level in more than a year — driven primarily by lower energy costs.

The data include big slowdowns for the 20-nation euro area’s top four economies and will be welcomed by politicians and monetary policymakers alike as the continent’s citizens struggle with a bruising cost-of-living crisis.

But the stubborn nature of the core measure means ECB officials plan to extend their unprecedented tightening campaign in two weeks’ time — despite Germany recently slipping into a recession and financial dangers still swirling.

Investors and economists widely predict another quarter-point move on June 15 and reckon there’ll probably be one more to round off the cycle, which has already brought the deposit rate to 3.25% from below zero last July.

Commenting on Wednesday on the national data, ECB Vice President Luis de Guindos said victory over inflation, which hit 10.6% at its peak, hasn’t yet been achieved.

“I think that we are on the correct trajectory,” he told reporters in Frankfurt. “We have to look very carefully at the evolution of core inflation.”

Estonia’s Madis Muller, meanwhile, said there’ll probably be more than one additional quarter-point hike — warning that underlying price pressure “unfortunately shows no signs of slowing yet.”

That’s a similar view to Bloomberg Economics’s Maeva Cousin, who said in a report before Thursday’s numbers that core inflation is likely to tick up again in June, keeping the ECB “on edge through the summer.”

Policymakers say bringing the growth in consumer prices back to the 2% target is essential to underpin economic expansion and financial stability, with both areas feeling the effects of rising rates.

Germany’s first recession since the pandemic underlined the vulnerability of the continent’s largest economy — even after it spent big to shield households from soaring energy bills following Russia’s invasion of Ukraine.

The ECB, meanwhile, warned this week that tighter policy leaves financial markets at risk of negative shocks and are testing the resilience of households, companies, governments and the real-estate sector.

The focus, though, remains on tackling prices, which involves not just raising borrowing costs but maintaining them once they reach their peak.

“Yes, headline inflation is coming down as we start to see the food and energy shocks dissipate,” Laura Cooper, Blackrock senior macro strategist for ishares EMEA, told Bloomberg Television earlier this week.

“But clearly the services inflation, the core gauges, continue to show price persistence and that does suggest that the ECB will have to keep rates in restrictive territory for quite some time,” she said.

--With assistance from Joel Rinneby, Harumi Ichikura and Jana Randow.