BRUSSELS (Reuters) – Euro zone inflation rose in June from a four-year low in May, defying expectations that it would be stable, as the negative impact of low energy prices decreased.
The European Union’s statistics office Eurostat said on Tuesday that consumer prices in the 19 countries sharing the euro rose by 0.3% in June from May and also increased 0.3% year-on-year after inflation of just 0.1% last month.
The headline inflation figure was above the average forecast of a Reuters poll of economists that it would be unchanged.
However, it is still far below the European Central Bank’s target of below, but close to, 2% over the medium term.
Energy prices were down 9.4% year-on-year, following an 11.9% plunge in May, while unprocessed food prices were 5.9% higher after a 6.7% increase in May.
Without these two volatile components — a measure the ECB calls core inflation and watches closely in policy decisions — prices grew 1.1% in annual terms, as expected and the same increase as in May.
An even narrower inflation measure excluding also alcohol and tobacco prices that many market economists look at, dipped to 0.8% year-on-year from 0.9% in May. This was also in line with economist expectations.
For details of Eurostat data click on:
http://ec.europa.eu/eurostat/news/news-releases
(Reporting by Philip Blenkinsop)
