Eurozone inflation drops to 2.8% in June, monthly rate negative

Annual inflation in the Eurozone decreased to 2.8% in June, down from 3.2% in May, according to preliminary data released by the European Statistical Office (Eurostat).

This marks the end of a rising inflation trend that had persisted since January. On a monthly basis, inflation in the Eurozone registered a negative 0.1% in June. Market expectations had anticipated annual inflation to be around 3% for June.

Core inflation, excluding volatile components like energy and food, was recorded at 2.4% on an annual basis and 0.2% monthly in June. The primary driver of inflation remained energy products, which saw the highest annual increase at 8.7%. Services followed with a 3.2% annual rise, while food, alcohol, and tobacco products increased by 1.6%. Non-energy industrial goods saw a more modest annual increase of 0.9%.

Country-specific data showed variations within the Eurozone. Annual inflation in Germany stood at 2.4%, France at 2%, Italy at 3.1%, and Spain at 3.6% in June.

The European Central Bank's target for inflation in the Eurozone is 2%. The recent decline in inflation brings it closer to this target, although energy prices continue to exert upward pressure.