Eurozone back in inflation for first time in five months

 
Jake Cordell
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Food prices edge up in June across the Eurozone, helping the bloc back to inflation for the first time since January
Food prices edge up in June across the Eurozone, helping the bloc back to inflation for the first time since January (Source: Getty)

Existential crises, political arguments and the clamour for referendums aside, the Eurozone nudged back towards a semblance of normality today, with a return to inflation in June.

Price rose by 0.1 per cent in the year to June, according to the official EU stats body, Eurostat, ticking into positive territory for the first time since January.

Cheaper energy costs than this time last year remained a drag on the overall index, but edged higher compared to last month, resulting in the uptick from an inflation rate of minus 0.1 per cent in May. Higher costs for services, food and drink in the 19-member single currency bloc also helped prices rise.

Read more: ECB launches next stage of quantitative easing

Analysts warned against getting too carried away or believing a corner has been turned, however. Danae Kyriakopoulou, managing economist at the Centre for Economics and Business Research (CEBR), said the course of price rises would be determined by global factors which affect energy prices.

Kyriakopoulou added with monetary policy reaching its limit in terms of its stimulating effect, ensuring domestic demand is supported by government action is more important than ever.

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