It's the lowest euro-area year-over-year inflation rate since the beginning of 2022. At the same time, June's 5.5% figure was higher than expected, suggesting that the European Central Bank could increase interest rates.Eurozone inflation let up further in June, Luxembourg-based statistics agency Eurostat reported Wednesday.

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Euro-area prices rose 5.5% year-over-year last month. In May that figure stood at 6.1%, while in April it was 7%.

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It marks the lowest inflation rate for the eurozone since the beginning of 2022.

Supply chain dysfunction after the COVID-19 pandemic, along with Russia's war on Ukraine and the ensuing energy crisis, are a few of the key drivers of high inflation over the last year.

Will the ECB raise rates further?

Although the inflation rate is sinking overall, the 5.5% in June was higher than the 5.4% anticipated by analysts.

This suggests that the European Central Bank (ECB) could increase interest rates further to put a damper on prices. The bank is targeting 2% inflation over the medium term.

The ECB will decide on whether it will raise rates next week in a meeting.

wd/sms (Reuters, dpa)

(The above story first appeared on LatestLY on Jul 19, 2023 04:00 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).