Oil lifts euro zone June inflation to 2.1%

The euro zone's inflation rate rose to 2

The euro zone's inflation rate rose to 2.1 per cent annually as expected in June from a revised 2 per cent in May, the EU's statistical agency said today.

Eurostat said the monthly increase in consumer prices in the 12-nation area was 0.1 per cent in June.

"Energy with an annual rate of 9.4 per cent has an important impact on annual inflation rate," Eurostat said in a statement.

Eurostat originally estimated the annual rate of inflation in May at 1.9 per cent. The core rate of inflation referred to by the European Central Bank (ECB), which excludes volatile energy and unprocessed food costs, fell to 1.4 per cent in June from 1.6 per cent in May, well below the ECB's target of keeping inflation below but close to 2 per cent.

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Prices of services, which grew 2.2 per cent, contributed to the increase in the headline inflation figure. Non-energy industrial goods rose 0.3 per cent, and food including alcohol and tobacco increased 1.2 per cent.

The ECB is resisting pressure from many politicians to cut its main interest rate from the current 2 per cent to revive the euro zone's stagnant economy.