Poland's June inflation falls to 2.5%, easing pressure on rates

Poland’s preliminary June consumer‑price data released by GUS show year‑on‑year inflation at 2.5 %, down from 3.1 % in May. The decline was driven by cheaper fuel (prices fell 7.4 % month‑on‑month) and a rare deflation in food and non‑alcoholic drinks, the first such drop since 2016. The figure sits within the National Bank of Poland’s 2.5 % target range, giving the monetary policy council more leeway and prompting speculation that interest‑rate cuts could follow later in the year.

Across the euro area, Eurostat’s quick estimate puts June inflation at 2.8 % year‑on‑year, down from 3.2 % in May. The slowdown reflects a sharp easing in energy price growth, which rose 8.7 % in June versus 10.8 % in May, while food, services and industrial goods price rises also moderated. The ECB, which raised its key deposit rate to 2.25 % in June, noted that energy costs remain elevated and that geopolitical tensions in the Middle East could keep inflation above target for a while, leaving the prospect of further policy tightening on the table.