Europe inflation slips to 5.5% — but that won't stop central bank rate hikes

Inflation in Europe slid again in June but fell too slowly to offer much relief to shoppers grumbling over price tags or to stop more interest rate hikes that will raise the cost of borrowing across the economy.

Inflation in Europe slid again in June but fell too slowly to offer much relief to shoppers grumbling over price tags or to stop more interest rate hikes that will raise the cost of borrowing across the economy.

The annual rate of 5.5% was down from 6.1% in May in the 20 countries that use the euro currency, the European Union statistics agency Eurostat said Friday.

While that is a big drop from the peak of 10.6% in October, persistently high prices in the U.S., Europe and the United Kingdom pushed some of the world's top central bankers to make clear they are going to keep raising rates and leave them there until inflation drops to their 2% goal considered best for the economy.

Consumers saw relief on energy prices, which dropped 5.6% after last year's crisis, while food price inflation was up 11.7%, easing from 12.5% in May.

Core inflation, which excludes volatile food and fuel and offers a clearer picture of longer-term price pressures, rose slightly to 5.4% from 5.3% the month before.

The initial outbreak of inflation was fueled by Russia's invasion of Ukraine, which sent energy and food prices higher. The global economy's rebound from the COVID-19 pandemic also strained supplies of parts and raw materials.

Energy and wheat prices have subsided to pre-war levels and supply chain problems have eased, but inflation has kept snaking through other parts of the economy.