Inflation in Germany, France and Italy cooled more than expected this month, suggesting price pressures are beginning to soften amid falling energy costs due to easing tensions between the U.S. and Iran.
In Germany, consumer price growth slowed to 2.4% on year from 2.7% in May, according to EU-harmonized data published by German statistics agency Destatis on Tuesday
Most Read from The Wall Street Journal A consensus of economists polled by The Wall Street Journal had expected inflation at 2.5%. Destatis said the rate of energy-price increases slowed again in June. Separate data released Tuesday showed French inflation also slowing to 2.0% from 2.8%, while consumer price growth in Italy cooled to 3.0% from 3.2%.
Both came in lower than economists’ forecasts of 2.3% and 3.2%, respectively. The easing in inflation follows a significant fall in energy prices over the month of June. Oil prices declined in anticipation of a tentative peace deal between the U.S. and Iran in mid-June, and have since fallen to their lowest levels since the conflict began, with markets increasing bets on a resumption of regular flows through the Strait of Hormuz. “As the situation in the Middle East stabilizes, the inflation shock is also subsiding,” Stephanie Schoenwald, economist at KfW Research, said in a note.