The inflation is driven by the price of services, which recorded a yearly inflation rate of 3.3 percent in June, up from 3.2 percent the previous month.

BRUSSELS, July 1 (Xinhua) -- The annual inflation rate in the Eurozone is expected to reach 2 percent for June, up from 1.9 percent in May, according to a flash estimate published Tuesday by Eurostat.

The inflation is driven by the price of services, which recorded a yearly inflation rate of 3.3 percent in June, up from 3.2 percent the previous month.

The prices of food, alcohol, and tobacco registered a 3.1 percent year-on-year inflation rate in June, down from 3.2 percent in May.

Inflation for non-energy industrial goods declined from 0.6 percent in May to 0.5 percent in June. A negative inflation rate of -2.7 percent was recorded for energy prices, an increase from -3.6 percent in May.

Core inflation, which excludes energy, food, tobacco and alcohol prices, was unchanged at 2.3 percent in June.

Among the main economies of the Eurozone, Germany recorded an inflation rate of 2 percent, down from 2.1 percent in May. France recorded an inflation rate of 0.8 percent, up from 0.6 percent in May, and Spain's inflation rate stands at 2.2 percent, up from 2 percent in May.

The highest inflation rate was recorded in Estonia at 5.2 percent, up from 4.6 percent the previous month, while Cyprus registered the lowest inflation rate for June at 0.5 percent, up from 0.4 percent in May.

"Inflationary pressures have clearly weakened as wage growth is coming down and economic performance remains sluggish, keeping the door open to another rate cut in autumn," said Bert Colijn, Chief Economist for the Netherlands at ING.

According to Colijn, risks such as oil price spikes and the outcome of tariff negotiations between the EU and the U.S. remain.

The European Central Bank (ECB) last month announced an eighth rate cut, bringing the policy interest rate to the lowest level since December 2022. According to the ECB statement, most measures of underlying inflation suggest that inflation will settle at around the 2 percent medium-term target on a sustained basis. However, the ECB has not yet dropped its guard, insisting that it is determined to ensure inflation stabilizes sustainably at its medium-term target.

Market expectations for interest rate cuts remained unchanged following the publication of the June inflation figures.