Moreover, the governing council of the ECB, which is currently grappling with its monetary policy decisions, remained focused on core inflation, which rose from 5.3% in May to 5.4% in June.
Food prices continued to remain elevated with an inflation rate of 11.7% in June, slightly lower than the 12.5% in May.
Energy prices continued their downward trend, with inflation dropping to -5.6%, a significant change from -1.8% a month ago.
The federal statistical office of Germany, Destatis, also added uncertainty to the falling inflation across the spectrum by reporting on Thursday 28 June that core inflation, excluding volatile food and energy, increased from 5.4% in May to 5.8% in June. Moreover, food prices were up 13.7% year-on-year. Notably, the services sector inflation rose from 4.5% in May to 5.3%.
Apart from Luxembourg, both Belgium and Spain reported inflation rates of 1.6%, below the ECB’s 2% target.
In terms of monthly changes, only five member states--Belgium, Latvia, Lithuania, the Netherlands and Finland--reported a decline in inflation, indicating that major economies on a broad scale still require further cooling.
On Tuesday 27 June, Christine Lagarde, president of the ECB, made a statement on the monetary policy stance, saying, “We have not yet seen the full impact of the cumulative rate hikes we have decided on since last July – amounting to 400 basis points. But our job is not done. Barring a material change to the outlook, we will continue to increase rates in July.”