Eurozone inflation eases but ECB likely to keep interest rates on hold

finance
Created 7/3/2024
Updated 7/3/2024

Inflation in the eurozone slowed to 2.5% in June, down from 2.6% in May, aligning with market expectations. However, core inflation, which excludes volatile items like food and energy, stayed at 2.9%, indicating persistent inflationary pressures. This scenario makes it unlikely for the European Central Bank (ECB) to cut interest rates at its upcoming meeting on July 18. The ECB, having recently reduced rates in June, will likely wait for more data over the summer. Analysts believe the ECB will be cautious, especially with stable service inflation and political uncertainties such as the French elections.

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