Inflation in the 20 countries of the Eurozone in June was 2.5% on year-on-year compared to 2.6% in May, according to Eurostat's preliminary estimate. The expected rise in consumer prices is in line with the forecast of economists polled by Reuters and Bloomberg.
The prices of services in June increased by 4.1% on an annual basis, and those of food, alcohol and tobacco products - by 2. 5%, industrial goods - by 0.7%, energy - by 0.2%. Core inflation, which excludes the prices of variable goods such as food, alcohol, tobacco and energy, was steady at 2.9% in June (it was a record high of 5.7% in March).
The highest inflation among the countries of the euro area is observed in Belgium (5.5% on an annual basis) and Spain (3.4%), lowest in Finland (0.6%) and Italy (0.9%). In Germany and France - the largest economies in the Eurozone, consumer prices increased by 2.5%.
The Governing Council of the European Central Bank (ECB) in June cut key interest rates by 25 basis points for the first time since 2019 p. (main interest rate was 4.25%) with the hope that by 2025 inflation would fall to the 2% target. The slowdown in June inflation to 2.5% is unlikely to give the ECB more clarity on where prices are heading. ECB chief Christine Lagarde said ahead of the release of inflation data that the eurozone “still faces some uncertainties”. “We will need time to gather enough data to be sure that the risks of above-target inflation have passed,” she said, calling for no rush to further ease monetary and credit policy.< /span>
Part of the ECB leadership is concerned about the high price growth in the service sector. Concerns are about labor shortages, rapid wage growth and low productivity in the service sector. All of these factors could keep headline inflation above target for an extended period.
Eurostat data shows that unemployment in eurozone countries remained at a record low of 6.4% in May.
Source: www.forbes.ru