Euro zone inflation amounts to 2% on soaring food and energy

Euro zone inflation amounts to 2% on soaring food and energy

In June, euro zone inflation reached 2% for the first time for more than a year because of soaring food as well as energy costs. It undoubtedly provided some comfort to the EU’s key financial institution because it considers reining in its excessive economic stimulus.

Inflation in the nineteen countries that share the common currency, inched up by up to 2% from May’s outcome of about 1.9%, EU statistics office Eurostat informed on Friday. The figure turned out to be in line with general market hopes because energy prices managed to tack on.

In February last year inflation accounted for 2%.

Without unprocessed food and also volatile energy prices, inflation amounted to 1.2%, below the average estimate of market experts for no change from May’s reading of 1.3%.

Another major inflation indicator, also excluding tobacco and alcohol prices, accounted for about 1% in June, slipping from May’s 1.1% and being in line with hopes.

Energy prices managed to ascend up to 8% year-on-year. At the same time unprocessed food edged up approximately 3%.

The ECB comes up with a mission to keep inflation below, although close to 2%. However, the given task has appeared to be challenging enough, even with economic surge on its best run for a decade.

This month the European Central Bank has made up its mind to have its 2.6 billion euro bond purchase program stopped by the end of 2018. Furthermore, the key bank emphasized that interest rates would be intact by summer 2019.

However, the real threat of a global trade feud as well as the uncertain budget policies of the fresh Italian government might endanger the EU economy.

By the way, Eurostat's flash estimate for the month doesn’t come with a monthly calculation.




CPI is the most important inflation data that affects the Central Bank’s monetary policy.


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