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Eurozone inflation slows in June as services and core pressures cool

Eurostat data show energy inflation eased to 8.5% from 10.8% but still contributed 0.77 percentage points of headline inflation, leaving the ECB focused on underlying trend progress.

Reported · Written up by our desk · Economy

Eurozone inflation moderated in June, with Eurostat confirming annual consumer price growth slowed to 2.8% from 3.2% in May.

The European Union reading eased to 2.9% from 3.3%, and inflation fell in 22 of the member states, suggesting the improvement was broad based rather than driven by isolated countries.

In the euro area, services inflation cooled to 3.2% from 3.5%, while core inflation excluding energy slowed to 2.2% from 2.4%. The energy excluding measure that also removes food, alcohol, and tobacco moderated from 2.6% to 2.4%, as food inflation declined to 1.5% from 1.9%.

Energy remains the main obstacle to a full return to price stability, with annual energy inflation easing to 8.5% from 10.8% after a -1.8% monthly drop in energy prices, though it still accounted for 0.77 percentage points of headline inflation, according to analysis by Action Forex. The outlet said the ECB is unlikely to declare victory while geopolitical risks could keep energy markets volatile, and that further progress in services and core inflation will be key for a sustainable move back toward the ECBs 2% goal.

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