Eurozone inflation marginally rises to 2 percent

Eurozone inflation rose slightly in June. The annual inflation rate rose to 2.0 percent, the Eurostat statistics office announced in Luxembourg on Tuesday, according to an initial estimate. In May, the inflation rate had fallen to 1.9 percent. Economists had, on average, expected this slight increase.

Inflation in the Eurozone is thus in line with the European Central Bank’s (ECB) medium-term inflation target of 2 percent. The core inflation rate, which excludes certain, particularly volatile components, is higher at 2.3 percent.

In early June, given concerns about the economy and declining inflation, the ECB cut its deposit rate for the eighth time since last summer. The rate was cut by 0.25 percentage points to 2.0 percent. Most economists expect a pause in interest rate changes for the next ECB decision on July 24.

The uncertainty surrounding the consequences of the trade disputes with the US will likely also play a role. The future path of inflation has become more uncertain with US President Donald Trump’s aggressive tariff policy. Tariffs could impact the prices of industrial goods and also affect consumers.