Daily Management Review

Eurostat: Annual inflation in euro area stays below ECB target


Inflation in the eurozone was stable in June, remaining well below the target level of the European Central Bank.

Consumer prices in the euro area in June rose by 1.2% in annual terms, according to preliminary data from the Statistical Office of the European Union (Eurostat). The result coincided with the forecast of analysts polled by Bloomberg. A month earlier, inflation was also 1.2%. The target inflation rate is set by the European Central Bank at "just below 2%."

Food, alcohol and tobacco in June rose by 1.6% after climbing up by 1.5% a month earlier. Rising prices for services accelerated from 1% to 1.6%.

Following the June meeting, the ECB decided to extend the period of record low interest rates. Now the central bank intends to keep rates at their current levels at least until the end of the first half of 2020 - six months longer than previously planned. 

Last week The ECB Head Mario Draghi said that the central bank may have to soften its monetary policy at the expense of a new reduction in interest rates or asset purchases unless inflation return to the target mark.

source: reuters.com