Eurozone inflation eased in June

Eurozone inflation eased in June. According to experts, this will not be enough to convince the European Central Bank /ECB/ to speed up the cycle of interest rate cuts despite weak economic growth.

Consumer prices remain stubbornly above the ECB's 2% target, although a return to easing inflation will undoubtedly be welcomed by officials.

Consumer price inflation in the single currency area reached 2.5% in June, down from 2.6% in May, the EU statistics agency Eurostat said.

May's data was higher than expected, beating April's 2.4%.

Economists polled by FactSet and Bloomberg had forecast June inflation to ease to 2.5%.

Core inflation, which excludes volatile energy, food, alcohol and tobacco prices and is a key gauge for the bank, was unchanged at 2.9% in June. Experts expected it to drop to 2.8%.

Inflation has been slowly falling since reaching 10.6% in October 2022 following the outbreak of war in Ukraine, which forced the ECB to launch an unprecedented series of interest rate hikes.

On June 6, the ECB cut interest rates for the first time since 2019, but officials tried to temper expectations of another cut in borrowing costs at their July meeting.

"Our work is not done and we must remain vigilant," ECB President Christine Lagarde warned.

"We will not rest until the game is won and inflation returns to two percent," she added in a speech in Portugal. I BGNES