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Euro zone June inflation slowdown confirmed, but core rate rises

A picture illustration taken with the multiple exposure function of the camera shows a one Euro coin and a map of Europe, January 9, 2013. REUTERS/Kai Pfaffenbach

BRUSSELS (Reuters) - Euro zone headline inflation slowed in June but the core figure excluding volatile unprocessed food and energy rose, the European Union’s statistics office said on Monday, confirming its earlier flash estimates.

Eurostat said consumer prices in the 19 countries sharing the euro rose 1.3 percent year-on-year in June, in line with market expectations, decelerating form 1.4 percent in May and 1.9 percent in April.

But its core measure of price growth, which excludes unprocessed food and energy and is closely watched by the European Central Bank, rose to 1.2 percent on the year from 1.0 percent in May.

The figure was above market expectations of a 1.1 percent rise, but matched Eurostat’s earlier flash estimate released at the end of June.

On a monthly basis, headline inflation was zero in June, while core inflation was 0.2 percent, Eurostat said.

Headline inflation eased in June mostly because of the marked slowdown of energy prices, which grew by 1.9 percent year-on-year from 4.5 percent in May and 7.6 percent in April. On the month, energy prices were down 0.9 percent.

Inflation also slowed down to 1.4 percent on the year for food, alcohol and tobacco products in June from 1.5 percent in May. On the month, prices for this indicator decreased by 0.2 percent.

But inflation accelerated for services, the largest sector of the euro zone’s economy, to 1.6 percent on the year from 1.3 percent in May. Month-on-month, the sector saw a 0.6 percent price rise.

Prices grew at a faster pace also for industrial goods, excluding energy, with inflation slightly picking up to 0.4 percent on the year from 0.3 percent in May, although on a monthly basis prices fell by 0.4 percent.

Reporting by Francesco Guarascio @fraguarascio; editing by Philip Blenkinsop