Inflation in the dozen euro countries accelerated for the first time in four months in June, easing concern that deflation will push the economy into recession.

　　Consumer prices rose 2 percent in the year to June, up from 1.9 percent in May, the Luxembourg-based European statistics office said in an initial estimate. Adding to signs of an economic recovery, business and consumer confidence rose in June, European Commission surveys showed.

　　Falling prices in Germany, Europe's largest economy, stoked talk that the euro area might encounter Japan's experience with deflation - a protracted drop in prices in an economy that isn't growing. European Central Bank President Wim Duisenberg said yesterday he wasn't concerned about deflation "because there is none."

　　"It's psychological - if people see the inflation rate dropping month after month, they will give more credence to the deflation theory," said Miranda Xafa, an economist at the Eurozone Advisors consultancy. "Now they see an uptick, deflation fears should recede."

　　The Bundesbank and IMF have said there is a risk of deflation in Germany, where inflation slumped to a three-and-a-half-year low of 0.7 percent in May. Policymakers want to prevent the economy mimicking Japan, where consumer prices have been sliding since 1998. In June, Germany's inflation rate rose to 1 percent.

　　The ECB earlier this month lowered its expectation for economic growth this year to 0.7 percent. Duisenberg said inflation will "hover broadly around" the ECB's 2 percent limit for the rest of this year.