German June inflation confirmed at 2.3%, helped by fuel rebate

Germany's annual inflation rate eased to 2.3% in June, helped by lower oil prices and a temporary fuel tax rebate introduced by the government, official data showed on Friday.

The Federal Statistical Office, known as Destatis, confirmed its preliminary estimate, with consumer prices slowing from 2.6% in May and 2.9% in April. 

Energy remained a key driver of inflation, though its impact was cushioned by the fuel tax rebate, which has since expired. Household energy and fuel costs were still 3.4% higher than a year earlier in June.

Economists warn that prices could rise more sharply again in July following the end of the fuel tax relief. They are also watching the ongoing tensions in the Middle East, where the most recent military escalation between the United States and Iran have again pushed oil prices higher.

Food prices rose 0.4% year-on-year in June, the same rate as in May. Services - including restaurant visits and travel - remained a significant driver of inflation, with prices rising 3.1% from a year earlier, matching the previous month's rate. 

The Federal Statistical Office put the so-called core inflation rate, which excludes volatile energy and food prices, at 2.5%.

The data comes as the European Central Bank (ECB) faces pressure to bring inflation back to its 2% target. With inflation in the eurozone rising sharply following the oil price shock from the Iran war, the ECB raised its key interest rates in June for the first time in almost three years. The bank expects it will not reach its 2% target again until 2028, meaning further interest rate increases are possible.