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Euro zone inflation falls more than expected, adding to ECB case for patience
Core inflation also eased to 2.4%, strengthening the case for the European Central Bank to hold rates steady at its July meeting.
- Overall inflation in the 21 nations sharing the Euro currency slowed to 2.8% in June from 3.2% in May, falling well below expectations of 3.0%.
- The unexpected easing curbs immediate pressure on the European Central Bank to raise interest rates again this month, giving policymakers time to assess evolving price pressures.
- Underlying prices excluding volatile food and fuel slowed to 2.4% from 2.6%, while services inflation dropped to 3.2% from 3.5%, though both remain above the ECB's 2% target.
- Policymakers indicate no rush to follow June's quarter-point rate hike with another move this month, though most economists expect the ECB to resume increases in September or October.
- Fertilizer shortages from the Middle East and a European heatwave could limit crop yields and lift food prices, while energy costs remain volatile due to ongoing geopolitical uncertainty.
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This is good news for the ECB and can condition future decisions to raise interest rates. Inflation in the euro area fell in June from 3.2% to 2.8%.
·Portugal
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In Sintra, Portugal, the major central bankers found that inflation in the euro area had declined faster than expected, following the agreement between Iran and the United States. The price rise was 2.8% in June, compared with 3.2% in May.
·Paris, France
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Inflation in the euro area has weakened.
·Germany
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The slowdown in Iran's conflict dampens inflation: consumer prices in the euro area rose by 2.8 percent in June compared to the previous year. This puts pressure on the ECB to increase interest rates rapidly.
·Hamburg, Germany
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Coverage Details
Total News Sources41
Leaning Left4Leaning Right7Center6Last UpdatedBias Distribution41% Right
Bias Distribution
- 41% of the sources lean Right
41% Right
L 24%
C 35%
R 41%
Factuality
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