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Investing.com -- Consumer prices in the eurozone rose slightly in June, data confirmed Thursday, ahead of the European Central Bank’s next policy-setting meeting later this month.
The consumer price index (CPI) rose by 2.0% annually last month, matching the ECB’s target midpoint, accelerating marginally 1.9% in May, and in line with expectations.
Month-on-month, the reading rose 0.3% after coming in flat last month.
Stripping out more volatile items like food and fuel, the "core" number climbed by 2.3% in the twelve months to June, matching the level seen the prior month.
These final figures confirmed the preliminary readings seen at the start of the month.
The ECB cut interest rates last month for the eighth time in a year, but indicated it would likely pause at its next meeting, citing uncertainty linked to trade tensions with the United States.
A "steady hand" was required to deal with the uncertainty unleashed by U.S. President Donald Trump’s latest tariff threat, European Central Bank policymaker Joachim Nagel said to business daily Handelsblatt, earlier this week.
The effect on prices of both the geopolitical environment and the trade conflict with the United States was "extremely uncertain", he added.
Trump threatened a 30% tariff on EU imports over the weekend, a more severe hit than the ECB had anticipated even under the most negative of three scenarios it released last month.
This move is complicating the ECB’s decision-making but is unlikely to derail plans for a pause in rate cuts next week, five ECB policymakers told Reuters.
It means the ECB has been forced to come up with new estimates and policymakers to contemplate a more negative outcome than they thought possible in June, said the five sources, all members of the ECB’s Governing Council.