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Eurozone inflation lets up further in June

July 19, 2023

It's the lowest euro-area year-over-year inflation rate since the beginning of 2022. At the same time, June's 5.5% figure was higher than expected, suggesting that the European Central Bank could increase interest rates.

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A symbol photo of Eurobills and a shopping cart filled with groceries
High inflation rates across Germany and the EU have made many Europeans worried about keeping up with the rising cost of livingImage: Frank Hoermann/SvenSimon/picture alliance

Eurozone inflation let up further in June, Luxembourg-based statistics agency Eurostat reported Wednesday.  

Euro-area prices rose 5.5% year-over-year last month. In May that figure stood at 6.1%, while in April it was 7%.

It marks the lowest inflation rate for the eurozone since the beginning of 2022.

Supply chain dysfunction after the COVID-19 pandemic, along with Russia's war on Ukraine and the ensuing energy crisis, are a few of the key drivers of high inflation over the last year. 

The European Central Bank in Frankfurt
All eyes now are on the European Central Bank and whether it will raise interest rates due to the inflation figuresImage: Ralph Orlowski/Getty Images

Will the ECB raise rates further?

Although the inflation rate is sinking overall, the 5.5% in June was higher than the 5.4% anticipated by analysts. 

This suggests that the European Central Bank (ECB) could increase interest rates further to put a damper on prices. The bank is targeting 2% inflation over the medium term.

The ECB will decide on whether it will raise rates next week in a meeting. 

wd/sms (Reuters, dpa)

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ECB statement on monetary police and inflation

www.ecb.europa.eu