Eurozone inflation slows to 2.8% as ECB eyes rate pause

Eurostat reported that euro‑area inflation fell to 2.8% in June, down from 3.2% in May, with core inflation at 2.4%, energy prices dropping to 8.5% and services easing to 3.2%. The decline was seen in 22 of the 27 EU members and reduces pressure on the European Central Bank (ECB) ahead of its policy meeting on Thursday. Markets anticipate that the ECB will keep rates unchanged, with the first possible cut not expected before September. Analysts note that renewed tensions between the United States and Iran could lift oil prices again, potentially reviving inflationary pressures. ECB President Christine Lagarde reiterated a “meeting‑by‑meeting” approach, and most economists expect no further rate hikes at the upcoming session. European stock markets opened with modest losses as investors weigh corporate earnings, the UK’s inflation dip to 2.6%, and the prospect of a milder monetary‑policy path. Germany’s DAX was flat, France’s CAC 40 slipped slightly, and Britain’s FTSE 100 edged lower, while banks such as Santander reported strong earnings.