Eurostat said eurozone inflation eased last month, but underlying readings remained stubbornly high Wednesday, confirming preliminary data that raised worries at the European Central Bank (ECB) about the persistence of price pressures.

Consumer inflation in the 20 nations sharing the euro eased to 6.9% from 8.5%, primarily on a rapid fall in energy costs as natural gas prices keep declining after their surge a year ago on Russia's invasion of Ukraine.

But ECB policymakers now worry that high energy costs have seeped into the broader economy and linger in everything from services to wages, making inflation more challenging.

Indeed, excluding unprocessed food and fuel, prices accelerated to 7.5% from 7.4%. An even narrower inflation measure that strips out alcohol and tobacco picked up to 5.7% from 5.6%, in line with preliminary data.

Persistently high core readings are why most ECB policymakers have already said that interest rates will need to keep rising, despite a record-breaking 350 basis points of hikes since last July.

The debate now appears to be between a 25 basis point and a 50 basis point increase at the May 4 meeting, with April inflation data, due just two days before the decision, likely be the determining factor.

For now, markets are leaning towards the minor move, but investors still see a one in three chance that the ECB will go for a more significant increase.

Bets that the Bank of England (BoE) will also hike rates further in May rose on Wednesday after Britain became the only country in Western Europe to register double-digit inflation in March.

The ECB's May rate hike is not likely to be its last, and markets now see 85 basis points worth of hikes before the 3% deposit rate reaches its peak or terminal velocity.

The ECB's main worry is that services inflation, now at 5.1%, is too quick and could signal that wages are becoming a key problem as labor costs predominantly determine service prices.

Another issue is that food inflation keeps accelerating, which has an oversized impact on consumers' inflation perception, potentially changing spending behavior and pressuring wage demands.

Unprocessed food inflation rose 14.7% last month from 13.9% in February.

Wages are rising by 5% to 6% this year; wages are still catching up after workers lost a chunk of their income to inflation in 2022. But this rate is inconsistent with the ECB's 2% inflation target so disinflation could be painfully slow.

The bloc's labor market also remains exceptionally tight, with widespread workforce shortages likely across services this summer, suggesting that wage pressures could still accelerate.

ECB policymakers see underlying price growth accelerating for another few months before a plateau, and a meaningful decline may not come before the autumn.