Eurozone annual inflation turned negative in June for the first time on record, falling 0.1% over 12 months, according to a flash  estimate today from the Eurostat, the  EU statistics office.

In May, annual inflation was 0.0% in May - - the lowest point on records going back to 1996.

Inflation hit record levels of 4% last June and July, as oil hit a record over $147 a barrel in July. 

The European Central Bank's annual inflation target is "below but close to" 2%.

Eurozone inflation is measured by the Monetary Union Index of Consumer Prices (MUICP). To compute the MUICP flash estimates, Eurostat uses early price information relating to the reference month from Member States for which data are available as well as early information about energy prices.

The flash estimation procedure for the MUICP combines historical information with partial information on price developments in the most recent months to give a total index for the Eurozone. Eurosta says no detailed breakdown is available. However, experience has shown the procedure to be reliable (18 times exactly anticipating the inflation rate and 6 times differing by 0.1 over the last two years).

The Member States of the Eurozone are Belgium, Germany, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.

Annual inflation in OECD area slows sharply in May 2009

Consumer prices in the OECD in the mainly developed country OECD area rose by 0.1 % in the year to May 2009, compared with 0.6 % in the year to April, continuing the sharp fall in annual inflation since its peak of 4.9% in July 2008. Month-on-month, prices rose by 0.2% in May, unchanged from April 2009.

Consumer prices for energy were down by 16.2% in the year to May 2009, following a fall of 13.5% in April. Consumer prices for food were up by 2.7% in the year to May, compared with 3.4% in April. Excluding food and energy, consumer prices rose by 1.7% in the year to May 2009, compared with 1.8% in April 2009.