Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Eurozone inflation hit 2 per cent in June, rising back up to the European Central Bank’s medium-term target.
June’s annual inflation reading was an increase from May’s figure of 1.9 per cent and in line with economists’ expectations in a Reuters poll.
The ECB has halved rates to 2 per cent since last summer but is expected to hold borrowing costs steady at its next meeting, with investors pricing in one more quarter-point cut later this year.
President Christine Lagarde last month said that the ECB believed it was now “in a good position to navigate the uncertain conditions” and that the central bank was “getting to the end of a monetary policy cycle”.
Investors interpreted the remarks as a sign that the ECB would pause its rate cuts at its next meeting in July.
Oil prices temporarily soared by up to 26 per cent after Israel began bombing Iran in June, reaching the highest level since the start of the year. However, most of those gains reversed after the US entered the conflict and brokered a ceasefire.
The euro has appreciated nearly 14 per cent against the US dollar since the start of the year, making many imports to the Eurozone cheaper and having a downward effect on wider price pressures.
This is a developing story
