Annual consumer inflation in the eurozone, the 20-country bloc that uses the euro, slowed to 5.5% in June from 6.1% the previous month, but underlying "core" inflation ticked up from 5.3% to 5.4%. File photo by John Angelillo/UPI
June 30 (UPI) -- Consumer inflation in the euro area fell to 5.5% in June from 6.1% in May, helped by a sharp fall in energy prices and slowdowns in price rises of food, non-energy industrial goods and services, the EU's main statistical agency said Friday.
Energy prices fell for the second straight month, down 5.6% compared with a 1.8% fall in May while the pace at which food alcohol and tobacco prices rose was 11.7% compared with 12.5% in May, followed by non-energy industrial goods, which slowed from 5.8% in May to 5.5%, according to flash estimates from Eurostat.
Services inflation in the 20 countries that use the euro also slowed from 5.4% to 5% but critical core inflation -- which strips out volatile items like food and energy -- ticked up by 0.1% to 5.4%.
Spain, Belgium and Luxembourg all managed to virtually halve their annual inflation rates to below the European Central Bank's target of 2%. Spain and Belgium both saw their rates fall to 1.6% -- down from 2.9% and 2.7% respectively -- while Luxembourg's rate fell from 2% to 1%.
The other 17 countries also saw inflation down on June 2022 although it remained above 8% in the Baltic states of Latvia, Lithuania and Estonia and in double digits in Slovakia.
However, on a month-on-month basis, inflation picked up in every country apart from the Netherlands, Finland, Latvia and Lithuania which saw the pace at which prices were rising slightly ease.
The inflation numbers come two weeks after the central bank hiked its main policy rate by 25 basis points to 4% in a bid to tame high inflation in the bloc.
Earlier this week ECB President Christine Lagarde said the bank was not done raising rates and was committed to reaching its 2% inflation goal "come what may."
Lagarde said "too high" inflation in the eurozone was in danger of becoming embedded in the economy.
Inflation had fallen from its 10.6% peak but getting it down to the ECB's 2% target would require raising rates to "sufficiently restrictive" levels and keeping them there "for as long as necessary", Lagarde told an ECB central banking forum in Portugal.
