Euro zone inflation held steady in June, meeting expectations, but remained well below the European Central Bank's (ECB) target of around 2 percent.
Consumer prices rose by 0.5 percent year-on-year in June, according to official statistics released by Eurostat Monday, flat from May's figure. Before this year, the last time inflation was at 0.5 percent was in November 2009.
Low inflation has dogged the euro zone's stuttering economic recovery, and has led to concerns the region could be heading towards a period of deflation.
Last month, in an effort to combat growth-sapping disinflation, the European Central Bank (ECB) took the unprecedented step of imposing a negative interest rate on banks for their deposits—in effect charging lenders to park money with it. The move was part of a package of measures designed to boost the euro zone's economy, which grew by just 0.2 percent in the first three months of the year, quarter-on-quarter.
The ECB's Governing Council will announce its latest monetary policy decision on Thursday.
Janet Henry, chief European economist at HSBC, said the inflation figure for June was "actually quite low". She flagged that Germany's rate of inflation, published Friday, had come in stronger than expected, boosting expectations of a higher euro zone inflation print.
"This number reminds us that the inflation numbers are still coming in lower than expected in the case of the euro zone," she told CNBC. "In the coming months we're going to have to see how the ECB's current policies work, but for the moment the markets will be saying actually the ECB is going to have to do more."