The annual rate of inflation in the euro zone has risen slightly but remains stable and close to the European Central Bank's (ECB's) definition of price stability.
The Harmonised Index of Consumer Prices, a standardised measure of consumer price inflation in the European Union, stayed at 2 per cent in the EU in June, the same rate as May. In the 12 member states of the euro zone, however, the rate rose to 2.1 per cent in June from 2 per cent in May.
The slight rise in euro-zone inflation can be attributed to rising energy costs. Energy price inflation gathered pace in June to reach an annual rate of 9.4 per cent, due to strong increases in oil prices that month.
Energy prices in the 12 months to June were 7.8 per cent higher than in the preceding 12-month period, indicating a persistent trend of inflation in this category.
Strong rates of annual inflation were also registered in June for housing (4.8 per cent) transport (3.9 per cent) and education (3.4 per cent). Rates of price increases in the categories of communication, recreation, clothing and food were negative or slight.
Other price categories experienced inflation rates that were close to the euro-zone average.
In the 12 months to June, euro-zone inflation averaged 2.2 per cent. However, if the influence of energy prices is excluded, the rate of price inflation in the euro zone was only 1.7 per cent.
The ECB, which determines the level of interest rates for the euro zone, regards a rate of price inflation of close to 2 per cent as a sign of price stability. The governing council of the ECB meets next Thursday.
Inflation is running at 1.8 per cent in the two largest euro-zone economies, Germany and France. The rate in the Republic is 1.9 per cent.
The ECB has maintained its key main refinancing rate at 2 per cent but has recently come under pressure from Germany and France, which cite the dampening impact of high oil prices on growth as justifying a further cut. However, in its latest monthly bulletin, the ECB indicated that upside risks to euro-zone inflation remained.
