2023-06-30 09:15:41
Eurozone core inflation accelerated once more in June. It’s a setback for the European Central Bank (ECB), which is likely to strengthen its resolve to raise interest rates next month.
Core inflation, which excludes volatile items such as fuel and food, was 5.4% in June, according to Eurostat data released on Monday. was. Service prices have risen significantly. That was slightly below the median forecast of economists surveyed by Bloomberg.
The improvement in headline inflation may be overshadowed by a deterioration in core inflation. Headline inflation fell sharply to 5.5% from 6.1% the previous month, the lowest level since Russia invaded Ukraine. Lower energy costs contributed.
It will soon be a full year since the ECB began raising interest rates. De Guindos said on Monday that a rate hike in July was a “fait accompli” but that he didn’t know what would happen next September.
Euro-Area Inflation in June
Source: Eurostat
After the release of the inflation data, eurozone bonds continued to fall from the morning, and the ECB’s forecast for peak interest rates remained largely unchanged at 4%. German 10-year bond yields are up regarding 3 basis points to 2.44%.
Headline inflation in Spain fell below the ECB’s 2% target, while France, Italy and the Netherlands fell, although still well above target, in the 20-nation eurozone CPI figures released this week.
In Germany, however, inflation accelerated to 6.8% following the government introduced ultra-low rail fares in the same period last year.
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Inflation Rates Are Still Diverging Across the Euro Area
Change in consumer prices in June (YoY)
Source: Eurostat
Original title:Euro-Area Core Inflation Quickens Again in Setback for ECB (1)(excerpt)
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