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EU saw consumer prices rise slowly in June

EU saw consumer prices rise slowly in June

by Emery P. DALESIO 16.07.2021 From our online archive
Inflation in Luxembourg of 3.4% in June was higher than EU average
A passer-by walks past a Milan clothes shop offering summer sales on 7 July
A passer-by walks past a Milan clothes shop offering summer sales on 7 July
Photo credit: AFP

European consumers continued to see slowly rising prices in line with the goals of the guardians of the euro currency, the EU's Luxembourg-based statistics agency Eurostat reported on Friday.

The European Union's inflation rate was 2.2% in June – a third month at or above the 2% economic sweet spot set by the European Central Bank. Energy and industrial goods led the way, Eurostat said. The recent burst of rising prices could be temporary, with the ECB predicting inflation of just 1.4% in 2023.

Luxembourg, where prices rose 3.4% in June, was near the lead in a spring charge of higher prices, Eurostat said.

Inflation rates compared to June 2020 were highest in Hungary at 5.3% and the lowest in Portugal, where prices dropped by 0.6%.

Most economists believe that low, stable and predictable inflation is good for an economy because it gives consumers an incentive to make purchases sooner, which boosts economic activity. But the Covid-19's lessening grip on developed nations has led to sudden demand that has created shortages and supply-chain disruptions.

As Covid-19 vaccinations have allowed businesses and restaurants to operate with few restrictions, shoppers have also rushed back to stores and given European brands selling everything from watches to sneakers to handbags a boost. Sneaker-maker Puma raised its full-year sales guidance this week, the owner of Cartier and Van Cleef & Arpels reported first-quarter revenue more than doubled, while sales at Burberry Group topped estimates, Bloomberg reported.

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