On June 30, 2026, Germany reported its latest inflation figures. Yet top central bankers warned the energy-price shock is not over.
This is Germany's second straight month of declining inflation. The country's highest recent rate was 2.9% before these two drops.
France's 2% is the exact target the European Central Bank aims for across the euro zone.
For the euro zone as a whole, the estimated June inflation rate is 3%, down from 3.2% in the previous month.
The latest data comes amid ongoing concerns about the lingering effects of the Middle East conflict on energy costs. Central bankers have emphasized that while headline inflation is falling, underlying pressures from earlier energy price spikes may still feed into broader price measures. The ECB's target of 2% inflation for the euro zone remains a key benchmark, with France already hitting that level. Germany's rate, though lower, still exceeds the target, and policymakers are monitoring services and food inflation closely.
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The primary driver was a significant decline in oil prices. Crude oil traded at $70.99 per barrel, down 0.34% on the day.
The drop has directly lowered fuel costs for consumers and businesses across Europe.
European Central Bank Chief Economist Philip Lane spoke at the ECB's annual symposium in Sintra, Portugal. He urged caution despite the drop.
"What we need to look at is how the four months of energy-cost increases percolate into food inflation and into services inflation," Lane said in an interview with Bloomberg Television. "We're very much committed to going one meeting at a time, to not boxing ourselves in by speculating about rate decisions."
Bundesbank President Joachim Nagel also warned that the energy shock is not over. "The energy-price shock that started with that conflict in the Middle East is not over - it's still in the system," he told CNBC.
The ECB is watching how past energy cost increases might push up food and services prices later. Traders have changed their outlook. They no longer fully price another interest-rate hike this year.
The euro zone will publish its official June inflation estimate on Wednesday. Analysts surveyed by Bloomberg expect a slight slowdown to 3%. That forecast came from Bloomberg Economics' chief euro-area economist, Simona Delle Chiaie.
The article was written by Bloomberg's Nick Heubeck and published at 8:07 AM EDT on June 30, with an update at 8:34 AM EDT.
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