Eurozone Confirms June Inflation Easing as Energy Costs Unwind

Price pressures across the euro area eased in June, with final inflation data confirming a cooling in the bloc's largest economies as the energy-driven surge sparked by the Middle East conflict started to unwind. Germany, France and Italy all recorded softer readings than earlier in the spring, helped by falling oil and gas prices, with France's annual rate slowing to around 1.8% from 2.4% in May. The moderation follows a jump in euro-area inflation to 3.2% in May, the highest since late 2023, when a more than 10% surge in energy prices had rippled into services and core inflation. Analysts said that if oil and natural gas prices stay near current levels, headline inflation could fall further over the summer, potentially undershooting the European Central Bank's own projections. Even so, policymakers are expected to remain cautious. The ECB, which raised rates earlier in the year, has warned that inflation could stay above its 2% target through 2027 and 2028 without tighter policy, and officials have signalled a preference to wait and gather more data over the summer before deciding whether a further move is needed in the autumn.