Eurozone HICP Inflation Rises to 2.0% in June, Matching ECB Target

Eurozone HICP Inflation Rises to 2.0% in June, Matching ECB Target

Inflation in the eurozone increased slightly in June, with the Harmonized Index of Consumer Prices (HICP) climbing to 2.0% year-on-year, up from 1.9% in May, according to the latest figures released by Eurostat on Tuesday.

This aligns precisely with the European Central Bank’s (ECB) medium-term inflation goal, strengthening expectations that the ECB may stay cautious in its rate cut cycle in the months ahead.

Core Inflation Holds Steady

• Core HICP, which excludes energy and food, remained unchanged at 2.3% YoY, matching both the previous reading and market projections.
• On a monthly basis, HICP inflation advanced 0.3% in June, following a flat 0% in May.
• Core HICP monthly rose 0.4%, showing a more significant acceleration from the previous 0%.

Policy Implications for ECB

The data confirms that inflation is hovering right at the ECB’s target, reducing pressure for aggressive rate cuts in the near term. Markets will be closely watching upcoming central bank commentary and macro data for hints on timing of future monetary easing.

“With core inflation proving sticky and headline CPI hitting the ECB's target, policymakers may opt for a slower path to rate reductions,” analysts note.

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