Eurozone inflation remained low in June, putting pressure on the European Central Bank (ECB) to intervene. The annual inflation rate for the Eurozone was confirmed at 0.5% in June, according to Eurostat, the statistical office of the European Union. This figure is significantly below the ECB’s target of close to 2%, fueling concerns about deflation and prolonged economic stagnation.

The low inflation rate is primarily attributed to falling energy prices and weak demand across the Eurozone. Core inflation, which excludes volatile energy and food prices, also remained subdued, indicating underlying weakness in the economy.

The ECB has already implemented several measures to stimulate inflation, including:

• Cutting interest rates to record lows
• Providing cheap loans to banks
• Launching a quantitative easing program

However, these measures have so far failed to significantly boost inflation. As a result, there is growing pressure on the ECB to take further action, such as expanding its asset purchase program or implementing negative interest rates on commercial banks’ deposits.

Economists are divided on the effectiveness of further ECB intervention. Some argue that more aggressive measures are needed to prevent deflation, while others warn that such measures could have unintended consequences, such as asset bubbles and moral hazard.

The ECB’s next policy meeting is scheduled for July, and it is widely expected that the central bank will discuss further measures to address the low inflation rate. The outcome of this meeting will be closely watched by investors and policymakers alike.