Eurozone inflation rose slightly in June, ahead of the European Central Bank’s (ECB) next policy-setting meeting later this month.
The consumer price index (CPI) revealed that consumer prices rose by 2.0% annually last month, according to Eurostat, matching the ECB’s target.
It was line with expectations, but did marginally accelerate from the 1.9% recorded in May, which was a eight-month low.
Month-on-month, the reading rose 0.3%, after coming in flat last month.
Meanwhile core inflation, which strips out more volatile items like food and fuel, climbed 2.3% in the twelve months to June, matching the level seen the month before. This highlights persistent underlying price pressures, particularly in services.
Services inflation, a key focus for the ECB, rose to 3.3% in June from 3.2% in May, and jumped by 0.7% month-on-month,
These final figures confirmed the preliminary readings seen at the start of the month.
It comes as the ECB cut interest rates last month for the eighth time in a year, but indicated it would likely pause at its next meeting thanks to trade uncertainty.
US president Donald Trump threatened a 30% tariff on EU imports over the weekend, a more severe hit than Europe had anticipated.
Earlier this month ECB president Christine Lagarde reaffirmed the central bank’s commitment to price stability.
“Much of the policy challenge over the last few years has involved stabilising inflation while facing fundamental uncertainty about the economy.”
Inflation, she noted, had peaked higher than in previous soft-landing episodes, but also decelerated more rapidly. Growth, while muted, remained within the historical range, and the labour market proved “exceptionally benign”.
“It will take time for us to gather sufficient data to be certain that the risks of above-target inflation have passed,” she said. “Our work is not done, and we need to remain vigilant.”
The euro was down around 0.2% against the pound on Thursday, trading at 86.52 pence. Sterling was strengthen by weak UK jobs data which adds pressure on the Bank of England to reduce interest rates.