Eurozone inflation slows to 0.2%

French chickens on spits

Rising food prices were one factor keeping inflation positive

The eurozone’s inflation rate dipped slightly from 0.3% in May to 0.2% in June, according to official figures.

The reading marks the second month of a return to inflation after five months of flat or falling prices.

The European Central Bank (ECB) has been taking steps to reflate the economies of the 19 countries that use to euro.

Other figures showed that unemployment throughout the bloc remained at 11.1% in May, the same level as in April.

Unemployment in Germany was the lowest of the 19, at 4.7%, while crisis-struck Greece was the highest at 25.6%.

In March, the ECB began a €1 trillion stimulus programme to boost economic activity in the eurozone.

The rise in prices was due in part to an increase in food and beverage costs, which were 1.2% higher.

Jennifer McKeown, senior European economist economist at Capital Economics, said the inflation figure highlighted the importance of the ECB’s policy support: “The decline from 0.3% to 0.2% was more modest than we had anticipated.

“But the rate in the region is still clearly very low by international and historical standards – eurozone inflation has now been below 0.5% for a year… and we still suspect that additional monetary policy support will be needed to meet the inflation target for the region as a whole.”

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