Sharp drop in inflation in euro zone

Inflation in the euro zone fell markedly in June, with consumer prices rising month-on-month by 5.5 per cent as compared with 6.1 per cent in May. The figure was released by the Eurostat statistical office in Luxembourg on Friday.

This is the lowest inflation rate since the start of 2022. Analysts had expected a reduction to 5.6 per cent after inflation had hit double digits at times in the last year on account of the war in Ukraine.

In Spain in particular, inflation has once again slowed significantly. Consumer prices recorded according to the Harmonised Index of Consumer Prices (HICP) used in the EU were only 1.6 per cent higher in June than in the same month last year, as reported by the INE statistical office in Madrid on Thursday. The rate had been 2.9 per cent the previous month. INE cited the fall in the price of petrol and diesel as the primary reason for the sharp drop in inflation, along with lower prices for electricity and food. Power in particular, more than 50 per cent of which is now derived from renewable sources in Spain, has come down significantly in price.