Euro Area Core and Headline Inflation Below Consensus

June flash data showed Euro area core and headline HICP inflation below consensus expectations. The cooling was largely driven by a sharp decline in services inflation.

Key Takeaways

• 1.Euro area headline HICP inflation declined to 2.80% yoy, coming in notably below the consensus forecast of 3.0%.
• 2.Core inflation surprised to the downside at 2.39% yoy, driven largely by lower-than-expected figures in Germany and other major economies.
• 3.Services inflation fell to 3.20% yoy, reflecting the unwinding of Easter-related volatility and a lack of signs of a strong travel season.

Table of Contents

• Euro Area: Core and Headline Inflation Below Consensus
• Key Numbers
• Main Points
• Exhibit 1: June HICP Tracking Estimates
• Exhibit 2: Core and Headline Inflation below Consensus in June
• Exhibit 3: We See Sequential Core Inflation at 0.13%mom in June, with Underlying Flash Momentum Moving Down
• European Economics Team
• Disclosure Appendix

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