euro area inflation june was confirmed slightly lower, with headline prices falling 0.1% on the month as energy costs dropped.
The report showed no change from the initial estimate for June. Annual headline inflation also slowed, helped by another decline in energy price inflation. Energy inflation fell to 8.5% in June from 10.8% in May.
Food and services prices also rose at a slower pace. Food price inflation eased to 1.5% in June from 1.9% in May. Meanwhile, services inflation slowed to 3.2% from 3.5%. Together, those moves led to a softer core price reading.
Euro Area Inflation June Breakdown
The monthly headline reading turned negative in June. The source said the 0.1% fall mainly reflected weaker energy prices. That marked a modest cooling in overall price growth across the euro area.
Annual inflation also moved lower as energy prices cooled further. In addition, slower food and services inflation added to the softer tone in the data. The source said those combined trends meant inflation did not worsen last month.
ECB Policy Flexibility After Data
The source said the June figures give the ECB more room to wait through the summer before deciding its next policy step. However, it also flagged a risk from renewed tensions in the Middle East conflict. If oil and gas prices rise again, that could lift price pressures during the summer.
Moreover, the source said that would raise the risk of second-round effects later on.
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Source: InvestingLive
