German inflation eases to 2.3% in June, below market forecasts

Germany’s annual inflation rate slowed to 2.3% in June, coming in below market expectations of 2.6%, preliminary data from the Federal Statistical Office showed Tuesday.

On a monthly basis, consumer prices in Europe’s largest economy fell 0.3% in June, Destatis said.

The June reading marked a decline from 2.6% in May and 2.9% in April, indicating a renewed easing in price pressures.

The harmonized index of consumer prices, used for comparison across the EU, rose 2.4% year-on-year in June, while declining 0.2% from the previous month.

Core inflation, which excludes volatile food and energy prices, remained unchanged at 2.5% in June.

Energy prices increased 3.4% from a year earlier, slowing sharply from a 6.6% annual rise in May and 10.1% in April.

Food prices rose 0.4% year-on-year, unchanged from May.

Services inflation stayed elevated at 3.1% in June, the same rate as in the previous month, while goods inflation eased to 1.7% from 2.2%.

The figures come as investors closely watch inflation trends in the euro area’s largest economy for signals on the European Central Bank’s next policy steps.