Eurozone CPI Slows to 2.8% in June; Services, Core Ease

Eurozone consumer inflation cooled to 2.8% in June from 3.2% in May, Eurostat confirmed. The European Union's inflation rate eased to 2.9% from 3.3%. The decline was broad-based, with inflation falling in 22 of the 27 member states.

The composition of the data showed further progress on domestic price pressures. Services inflation slowed to 3.2% from 3.5%, and core inflation excluding energy moderated to 2.2% from 2.4%. The broader measure excluding energy, food, alcohol and tobacco eased to 2.4% from 2.6%. Food inflation also softened, with the food, alcohol and tobacco category dropping to 1.5% from 1.9%.

Energy remains the most persistent source of price pressure. Annual energy inflation fell to 8.5% from 10.8%, helped by a 1.8% monthly decline in energy prices. Energy contributed 0.77 percentage points to headline inflation, limiting the overall slowdown.