A general view of the inside of the stadium as fans of Portugal celebrate after Portugal defeat Slovenia in the penalty shootout during the UEFA EURO 2024 round of 16 match between Portugal and Slovenia at Frankfurt Arena on July 01, 2024 in Frankfurt am Main, Germany.
Harriet Lander – Uefa | Uefa | Getty Images
Headline inflation in the euro area dipped to 2.5% in June, the European Union’s statistics agency said Tuesday.
That was in line with the expectations of economists polled by Reuters. In May, the inflation figure had nudged two percentage points higher, to 2.6%.
Core inflation, excluding the volatile effects of energy, food, alcohol and tobacco, stayed at 2.9% from the prior month, narrowly missing the 2.8% forecast.
The rate of price rises in services also failed to budge, holding at 4.1%.
Investors will now parse what the latest data means for the trajectory of interest rates in the 20-nation euro zone, following the European Central Bank’s initial 25 basis point step cut in June.
ECB Vice President Luis de Guindos told CNBC’s Annette Weisbach that, while the central bank was confident that inflation would converge to its 2% target, the coming months would be a “bumpy road” and there is no “predetermined path” for monetary policy. He was commenting on the sidelines of the ECB Forum on Central Banking in Sintra, Portugal.
Volatility in the headline consumer price index print has long been expected, as choppy base effects from the energy market unwind.
Money markets see a high likelihood of another two interest rate trims of 25 basis points each across the ECB’s remaining four meetings this year, according to LSEG pricing data. They price only a 33% chance of a follow-up cut this month.
This is a breaking news story and will be updated shortly.