The European Central Bank - along with its peers around the world - has been rapidly raising interest rates, the chief medicine against inflation. Hotels and airlines are charging summer travelers more, and workers are pressing for pay raises to make up for their lost purchasing power. The global economy’s rebound from the COVID-19 pandemic also strained supplies of parts and raw materials.Įnergy and wheat prices have subsided to pre-war levels and supply chain problems have eased, but inflation has kept snaking through other parts of the economy.Ĭompanies providing services instead of goods - a huge swath of the economy including everything from office cleaning to haircuts and medical care - have raised their prices. The initial outbreak of inflation was fueled by Russia’s invasion of Ukraine, which sent energy and food prices higher. Three countries came in under the ECB’s 2% goal: Luxembourg at 1%, Belgium at 1.6% and Spain at 1.6%. Germany, Europe’s largest economy, recorded 6.8%, and France saw 5.3%. Inflation varied widely across the eurozone - Slovakia had the highest at 11.3%.

While that is a big drop from the peak of 10.6% in October, persistently high prices in the U.S., Europe and the United Kingdom pushed some of the world’s top central bankers to make clear they are going to keep raising rates and leave them there until inflation drops to their 2% goal considered best for the economy.Ĭonsumers in Europe saw relief on energy costs, which dropped 5.6% after last year’s crisis, while food prices rose 11.7% from a year earlier, easing from 12.5% in May.Ĭore inflation, which excludes volatile food and fuel costs and offers a clearer picture of longer-term price pressures, rose slightly to 5.4% from 5.3% the month before. The annual rate of 5.5% was down from 6.1% in May in the 20 countries that use the euro currency, the European Union statistics agency Eurostat said Friday. FRANKFURT, Germany (AP) - Inflation in Europe slid again in June but fell too slowly to offer much relief to shoppers grumbling over price tags or to stop more interest rate hikes that will raise the cost of borrowing across the economy.

Inflation interactive games