Official figures this morning show that the annual rate of inflation in the euro zone held steady at 2.5% in June, after hitting a seven-month high in May. The data from the EU's Eurostat agency confirmed a previous estimate.
The rate, which was in line with economists' forecasts, means that inflation remains well above the European Central Bank's preferred level of close to but less than 2%. The ECB has raised interest rates three times since December, including a quarter-point hike last month to 2.75%, in a bid to keep a lid on inflation. Many economists also expect the ECB to raise interest rates in August.
Although headline euro zone inflation remained steady in June, Eurostat's preferred measure of underlying inflation crept higher. Inflation excluding volatile energy, food, alcohol and tobacco prices nudged up to 1.4% in June from 1.3% in May. Meanwhile, the ECB's preferred gauge of core inflation, which excludes energy and unprocessed food prices, rose to 1.5% over the period from a revised 1.4%.
Headline inflation has been climbing in recent months in the euro zone on surging oil prices, which are currently setting record highs due to tensions in the Middle East. But underlying inflation in the euro zone has so far remained tame, indicating that high oil prices are having a limited impact on other prices and wages.
Separate Eurostat figures showed that euro zone industrial output bounced back in May from a slump in April, growing 1.6% over the month and 4.9% over a year. The figures were stronger than expected. They also showed a recovery from April when output slipped 0.7% in the month.
