BRUSSELS, July 16 - Euro zone June inflation picked up to 2.0 percent, brushing the top of the European Central Bank's tolerance threshold, from 1.9 percent in May, Eurostat said on Wednesday, confirming an early estimate. That was in line with economists' expectations as was the monthly increase of 0.1 percent. Core inflation, which excludes volatile energy and unprocessed food costs, also rose by 0.1 percent on a monthly basis and at an annual rate of 2.0 percent.
National inflation rates continued to show a large variation, ranging from 0.9 percent in Germany to 3.8 percent in Ireland. The data comes on the same day that Bundesbank President Ernst Welteke was quoted in the Bild newspaper as saying he would not bet on any further European Central Bank interest rates cuts at the moment. ECB officials have also stressed that Europe does not face the risk of deflation, with board member Tommaso Padoa-Schioppa one of the latest to underline this point earlier this week. A breakdown of the June inflation data showed energy costs rose 1.6 percent from a year earlier, stronger than the 0.6 percent annual increase reported in May but still below the 7.5 percent rate seen in March. Prices charged by hotels and restaurants rose 0.5 percent on a monthly basis and by 3.1 percent from a year earlier.//