Eurozone Inflation Stable At 1.2%; Core Inflation Accelerates

Eurozone consumer prices increased at a steady pace in June, while core inflation bounced back, flash data from Eurostat showed Friday.

Inflation came in at 1.2 percent, the same rate as seen in May and in line with expectations. Final data is due on July 17.

The European Central Bank targets inflation "below, but close to 2 percent."

Meanwhile, core inflation that excludes energy, food, alcohol and tobacco, increased more-than-expected to 1.1 percent from 0.8 percent in May. Economists had forecast core prices to advance 1 percent.

The increase in core inflation seems to have been due to a rebound in volatile transport and holiday prices, rather than rising underlying price pressures, so it should not deflect the ECB from policy in the coming months, Andrew Kenningham, an economist at Capital Economics, said.

While leaving the interest rates unchanged on June 6, the ECB extended its forward guidance to reflect its view that rates will remain at the present level at least through the first half of 2020. Among components of HICP, food, energy and services increased 1.6 percent each, Eurostat data showed. Non-energy industrial goods prices gained only 0.2 percent in June.

Among big-four nation in the currency bloc, Germany's inflation held steady at 1.3 percent in June and France's inflation accelerated to 1.4 percent from 1.1 percent in May.

Meanwhile, Italy's inflation eased to 0.8 percent from 0.9 percent. Likewise, In Spain, inflation slowed to 0.6 percent from 0.9 percent.