Euro zone consumer prices rose for the first time in six months in May, providing respite for European Central Bank policy makers after a deflation scare drove them to unleash a trillion-euro stimulus programme.

The 0.3 per cent annual increase exceeded the 0.2 per cent median forecast of economists surveyed .

Core inflation accelerated to 0.9 per cent, the fastest in nine months, the European Union’s statistics office in Luxembourg said on Tuesday.

Improving inflation numbers across the euro area are largely due to a rebound in the price of oil since the beginning of the year.

While the upturn may be reflected in ECB policy makers’ assessment when they gather in Frankfurt this week, they’ll also have to take into account that inflation still remains well below their goal of just under 2 per cent.

"While this strengthening of inflation is good news, it is too early to tell whether we really have inflation lift-off," said Teunis Brosens, a senior economist at ING Bank NV in Amsterdam, citing weak selling-price expectations in surveys last month. "More data is needed to confirm the return of some healthy inflation."

The euro remained higher against the dollar . It extended its advance on reports that creditor institutions are wrapping up a new proposal aimed at breaking a deadlock in the Greek bailout talks.

– Bloomberg