By Don Nico Forbes
French inflation eased more than expected in June, suggesting price pressures are beginning to soften amid falling energy costs due to easing tensions between the U.S. and Iran.
Consumer price growth slowed to 2.0% on year from 2.8% in May, according to EU-harmonized data published by French statistics agency Insee on Tuesday.
A consensus of economists polled by The Wall Street Journal had expected a smaller decline, to 2.3%.
The decline was driven by a sharp slowdown in energy prices, particularly those of petroleum products, Insee said, adding that services prices also slowed to a lesser extent.
The easing in inflation follows a significant fall in energy prices over the month of June. Oil prices declined in anticipation of a tentative peace deal between the U.S. and Iran in mid-June, and have since fallen to their lowest levels since the conflict began, with markets increasing bets on a resumption of regular flows through the Strait of Hormuz.
Cooler inflation comes as a welcome sign for the European Central Bank, which earlier in June raised interest rates for the first time in almost three years, becoming the first major central bank to take action to tackle rising prices driven by the war in Iran.
Still, policymakers are expected to remain cautious as they assess whether recent energy-driven price pressures prove temporary or have longer-lasting price effects.
Write to Don Nico Forbes at don.forbes@wsj.com