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Eurozone inflation eases slightly, falls to 5.5% in June

June 30, 2023

Annual inflation dropped to 5.5% in the 20 eurozone countries. However, the European Central Bank is still expected to raise interest rates in July.

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A Euro-sculpture and the European Central Bank (ECB) headquarter are seen January 13, 2005 in Frankfurt, Germany.
The European Central Bank is still scheduled to hike interest rates in July, and possibly again in SeptemberImage: Ralph Orlowski/Getty Images

The eurozone annual inflation rate dropped slightly to 5.5% in June, down from 6.1% the month before, official data showed Friday.

Despite the rate easing, the European Central Bank is projected to continue with its consistent interest rate hikes, with another increase on the cards in July.

Central banks in Europe, the US and the UK are expected to keep raising interest rates until inflation is down to a 2% target, considered best for the economy.

What do we know about June's figures?

Energy costs dropped while food prices increased, the EU statistics showed.

Energy prices dropped 5.6% after last year's crisis, while food price inflation was up 11.7%, easing from 12.5% in May.

Core inflation, which is a more accurate depiction of longer-term price pressures, rose from 5.3% last month to 5.4%.

Russia's invasion of Ukraine and its many repercussions came last year on the heels of the COVID-19 pandemic, raising food and energy prices and leading to fears of recession.

Inflation: A global threat

rmt/nm (AFP, AP)