German headline inflation eases in June, core stabilises

By Maria Martinez

BERLIN, June ‌30 (Reuters) - German inflation ​slowed ​in June on lower energy prices while core inflation stabilised, easing concerns that price pressures from the Iran war ‌could spread more widely through the economy.

Inflation eased to 2.4% ⁠from 2.7% in May, preliminary data from the national statistics office showed on Tuesday.

Analysts ‌polled by Reuters had expected ‌the EU-harmonised consumer price index to rise 2.5%.

The decline was driven by a slowdown in energy inflation to 3.4% in June from 6.6% ​in May, reflecting a cut in fuel taxes introduced by the government to cushion war-related price increases.

Economists expect Germany's inflation rate ⁠to rise in July after the measure expires.

"The available figures so far show virtually no evidence ​of indirect effects from the at times massive increases in energy prices on the prices of other goods," said ​Ralph Solveen, senior economist at Commerzbank.

Core inflation, ‌which excludes volatile food and energy prices, was unchanged at 2.5%.

Services inflation also held steady at 3.1%.

The German ⁠data comes ahead of Wednesday's euro zone inflation release. Economists polled by Reuters expect inflation in the bloc to ease to 3.0% in June from 3.2% ⁠in May.

The European Central Bank raised interest rates for the first time in nearly ​three years in June, seeking to contain inflation before higher energy costs spread more broadly through the euro zone economy.

The German figures, together with a slowdown in ‌French inflation reported earlier on Tuesday, point to a softer euro zone inflation reading for June, said Claus ‌Vistesen, chief euro zone economist at Pantheon Macroeconomics.

"It makes an ECB hold ⁠in July all but certain, ‌unless oil prices stage ​a spectacular rebound before the meeting," Vistesen said.

(Reporting by Maria Martinez and Linda Pasquini. Editing by Friederike Heine and ‌Mark Potter)

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