Consumer prices provisionally moved much as expected in June. A 0.1 percent monthly rise was small enough to shave a tick off the annual inflation rate but, at 2.1 percent, this was still one of the highest readings since late 2011.
The flash HICP followed suit with also a 0.1 percent increase versus May that reduced its yearly rate to 2.1 percent from 2.2 percent.
In terms of the change in annual CPI inflation, the main upward pressure came from energy where the rate climbed from 5.2 percent to 6.4 percent. However, food (3.4 percent after 3.5 percent) was a little softer and a jump in overall goods inflation (2.8 percent after 2.5 percent) was offset by a fall in services (1.5 percent after 1.9 percent). Rent, excluding utilities, was flat at 1.6 percent.
The dip in inflation in Germany contrasts with the rises already announced in Italy (see today's calendar entry) and Spain (2.3 percent after 2.1 percent) and probably means that the Eurozone's June flash HICP rate due tomorrow will show little change. More importantly for ECB policy, the underlying rates look likely to be largely stable too in which case the planned termination of the central bank's QE asset purchases this year cannot be taken for granted.