By Philip Blenkinsop
BRUSSELS (Reuters) – Euro zone economic sentiment dipped in June as industry gains were outweighed by less optimism among service firms and consumers, while inflation expectations rose, data from the European Commission showed on Wednesday.
Economic sentiment in the 19 countries sharing the euro fell to 104.4 this month from an downwardly revised 104.6 in May, against market consensus of a 104.7 reading.
All the data were collected before the results of the British EU referendum were known, the European Commission said.
The decline was due to decreased optimism among consumers and managers in services, retail and construction. Confidence in the industrial sector improved slightly.
Separately, the Commission’s business climate index, which points to the phase of the business cycle, dipped to 0.22 in June from 0.26 in May. Market forecasts were for an unchanged reading.
Consumer expectations of price trends over the next 12 months rose for a third straight month to 5.1 in June from 3.4 in May, although they remained well below the long-term average of 19.2.
Companies’ expectations of developments in producer prices also increased for a fourth consecutive month to 0.7 from -0.7 in May, the first positive reading since October 2014 and the highest level since January 2014, although still below the long-term average of 4.8.
The European Central Bank carefully watches inflation expectations in its monetary policy decisions. The bank aims for inflation in the euro zone to be below, but close to 2 percent, over the medium term.
For European Commission data click on:
(editing by Robert-Jan Bartunek)