Eurozone inflation edged up to 2.0% in June, aligning precisely with the European Central Bank’s (ECB) target and marking a slight increase from 1.9% in May 2025.
The small rise was largely driven by persistent services inflation, which climbed to 3.3%, and steady increases in food, alcohol, and tobacco prices at 3.1%.
Core inflation, which excludes volatile items like energy and food, held firm at 2.3%, suggesting underlying price pressures remain stable. Energy prices, however, continued to decline, easing some of the broader inflationary strain.
The ECB, having already cut interest rates earlier this year, now faces a delicate balancing act. While inflation appears under control, economic growth remains sluggish, and ongoing trade tensions – particularly with the U.S. – could complicate the outlook.
With inflation now at target, attention shifts to whether the ECB will pause further rate cuts or act again to support the eurozone’s fragile recovery.