Annualized inflation across the European Union (EU) declined to 5.5% in June from 6.1% in May as energy prices continue to fall across the continent.
However, core inflation, which excludes volatile food and energy prices, remains stubbornly high throughout Europe, and rose to 5.4% in June from a reading of 5.3% in May.
Total or headline inflation in Europe is now at its lowest level since January 2022 but remains well above the European Central Bank’s 2% target.
Declining oil and gas prices exerted the most downward pressure on Europe’s inflation rate in June. However other consumer prices continue to rise or remain at current levels including groceries and food sold at restaurants.
Europe’s central bank raised interest rates to their highest level in 22 years on June 15 as it continues to try and lower inflation. Europe’s benchmark interest rate is now at 3.50%.
The European Central Bank also revised its inflation outlook, saying it now expects that inflation will reach an average 5.4% this year, 3% in 2024, and 2.2% in 2025.
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