German inflation slows to 2.3 percent in June as energy prices ease
German inflation fell to 2.3% in June from 2.6% in May, below the 2.6% economists expected, the Federal Statistical Office said. The driver is energy: oil has slid back toward pre-crisis levels as Middle East tensions eased. Europe's largest economy is feeling the de-escalation i
German inflation slowed to 2.3% in June, down from 2.6% in May and below the 2.6% that economists had expected, according to a first estimate from the Federal Statistical Office. Consumer prices actually fell 0.3% from the previous month. The main driver was energy. Annual energy-price growth eased to 3.4% in June, after running at 6.6% in May and 10.1% in April, as oil prices retreated toward pre-crisis levels following a calming of tensions in the Middle East. A temporary fuel rebate in May and June added to the downward pressure, trimming the headline rate by an estimated quarter of a percentage point. Core inflation, which strips out food and energy, held firmer at 2.5%, a reminder that underlying price pressure is cooling more slowly than the headline figure suggests. The reading is a clear example of how quickly shifts in geopolitical risk feed through to household budgets. The same energy spike that pushed prices up earlier in the year has reversed as the oil market settled, and Germany, the largest economy in the euro area, is now seeing that reversal in its inflation data. Final figures for June are due on July 10.