Reported by Consejeros Editorial Team
Inflation in the Eurozone offers some respite. In June, the Consumer Price Index (CPI) stood at 2.8%, down from 3.2% in May and below expectations, according to the preliminary estimate published by Eurostat, the statistical office of the European Union (EU). This was driven by a moderation across all components, particularly energy.
Specifically, energy prices rose by 8.7%, well below the 10.8% recorded the previous month; the cost of services rose by 3.2%, three tenths of a percentage point lower; the price of food, alcohol and tobacco increased by 1.6%, three tenths of a percentage point lower; and non-energy industrial goods rose by 0.9%, the same as the previous month.
By country, the lowest annual rates were recorded in Malta (1.9%), France and Estonia (both at 2%) and Germany (2.4%), whilst the highest annual rates were recorded in Lithuania (5.5%), Bulgaria (5.3%) and Croatia (4.2%) .
As for the core inflation rate – that is, the rate excluding the volatile prices of energy, food, alcohol and tobacco – it fell by two tenths of a percentage point to 2.4%.
Last month, the European Central Bank (ECB) decided to raise interest rates by 25 basis points for the first time since September 2023, bringing them to 2.25%. Furthermore, the ECB updated its macroeconomic projections.
In its baseline scenario, it has revised inflation upwards for this year and next and downwards for 2028. It now forecasts that inflation will average 3% in 2026, 2.3% in 2027 and 2% in 2028, given “a higher path for energy prices, which is expected to be passed on to some extent to inflation for food, goods and services”.
As for the core inflation rate, it estimates that it will average 2.5% in 2026 and 2027 and 2.2% in 2028, compared with its previous projection of 2.3%, 2.2% and 2.1%, respectively.
The European Central Bank will hold its next monetary policy meeting on 23 July.
