Eurozone Inflation Falls More Than Expected

Eurozone consumer price inflation dropped to 2.8% in June 2026, down from 3.2% in May and below market expectations of 3.0%, according to preliminary data. This marks the lowest rate since February, before the Iran war disrupted energy supplies and pushed oil prices higher, though it remains above the European Central Bank’s 2.0% target. Energy inflation eased significantly to 8.7% from 10.8%, while price growth also slowed for services (3.2% vs. 3.5%) and food, alcohol, and tobacco (1.6% vs. 1.9%). Non-energy industrial goods inflation held steady at 0.9%. The core rate, excluding energy and food, fell to 2.4% from 2.6% in May. Among major Eurozone economies, inflation slowed in Germany (2.4% vs. 2.7%), France (2.0% vs. 2.8%), and Italy (3.1% vs. 3.2%), but remained unchanged in Spain at 3.6%.

Eurozone consumer price inflation held at 3.2% in May 2026, the highest since September 2023 and well above the European Central Bank’s 2.0% target. Energy costs led the surge, rising 10.8%, the sharpest increase since February 2023, due to Middle East conflict-related supply constraints. Services inflation accelerated to 3.5% (from 3.0% in April), while non-energy industrial goods prices rose to 0.9% (from 0.8%). Food, alcohol, and tobacco inflation eased to 1.9% (from 2.4%). The core rate, excluding energy and food, climbed to 2.6% from 2.2%, signaling broadening price pressures. Among major economies, inflation rose in Spain (3.6% vs. 3.5%), the Netherlands (3.4% vs. 2.5%), Italy (3.2% vs. 2.8%), and France (2.8% vs. 2.5%), but slowed in Germany (2.7% vs. 2.9%).

Eurozone consumer price inflation reached 3.2% in May 2026, up from 3.0% in April and matching market expectations, according to preliminary data. This marks the highest rate since September 2023, staying significantly above the European Central Bank’s 2.0% target. Energy costs surged 10.9%, the steepest rise since February 2023, fueled by supply constraints tied to the Middle East conflict. Prices also accelerated for services (3.5% vs. 3.0% in April) and non-energy industrial goods (0.9% vs. 0.8%), while inflation for food, alcohol, and tobacco eased (2.0% vs. 2.4%). The core rate, excluding energy and food, climbed to 2.5% from 2.2%, suggesting broadening price pressures beyond energy. Among major Eurozone economies, inflation picked up in Spain (3.6% vs. 3.5%), the Netherlands (3.4% vs. 2.5%), Italy (3.3% vs. 2.8%), and France (2.8% vs. 2.5%), but slowed in Germany (2.7% vs. 2.9%).