Germany's inflation rate slowed more than expected in June, official data showed today, in welcome news for the European Central Bank following last month's first interest rate cut since 2019.

Inflation in Europe's biggest economy edged back down to 2.2% from a year ago, preliminary data from federal statistics agency Destatis showed.

The decline comes after one-off factors saw consumer prices rise by 2.4% in May, the first increase in six months.

Analysts surveyed by FactSet had expected the inflation figure to stay unchanged in June.

"The ups and downs continue - yet the overall trend is moving in the right direction," said KfW chief economist Fritzi Koehler-Geib.

German energy prices fell by 2.1% year-on-year in June, compared with a decline of 1.1% in May.

Food inflation accelerated by 1.1% in June, while prices for services rose by 3.9%, unchanged from May.

Germany's June data will likely be cheered by European Central Bank policymakers, after they began reducing interest rates last month in the face of steadily falling euro zone inflation.

The rate cut lowered the ECB's closely-watched deposit rate from a record 4% to 3.75%.

But ECB chief Christine Lagarde warned that there was still a "long way to go until inflation is squeezed out of the economy".

Lagarde and other ECB officials have since been at pains to temper expectations of another reduction in borrowing costs at their July meeting, saying there was no "pre-determined" rate path.

Euro zone inflation rose faster than expected in May, to 2.6%.

The euro zone's June inflation reading will be published tomorrow.

Earlier figures showed that inflation fell in five important German states in June, preliminary data showed today.

In Saxony, the inflation rate fell in June to 2.8% from 3.1% in the previous month, in Brandenburg it fell to 2.6% from 2.9%, in Baden-Wuerttemberg it fell to 1.9% from 2.1%, and in Hesse it fell to 1.8% from 1.9%.

The inflation rate in North Rhine-Westphalia, Germany's most populous state, fell to 2.2% in June from 2.5% in May.

In Bavaria, the inflation rate remained unchanged at 2.7% in June.