Official data released on Friday revealed that Eurozone inflation was steady in July, defying predictions that increases in consumer prices would slow.
According to the EU’s statistics agency, the single currency area’s inflation rate was 2.0 percent last month, helped in part by a less significant decline in energy costs than the previous month.
The July figure was within the European Central Bank’s two-percent target, despite analysts polled by FactSet and Bloomberg predicting inflation would slow to 1.9 percent.
As predicted by economists, core inflation, which excludes volatile costs for food, energy, alcohol, and tobacco, remained steady at 2.3%.
Energy prices, however, fell by 2.5 percent in July a smaller drop than the decline of 2.6 percent recorded in June, Eurostat data showed.
Meanwhile, food and drink price increases accelerated to 3.3 percent last month, after registering 3.1 percent in June.
In contrast, services price rises eased to 3.1 percent in July, from 3.3 percent in June.
Inflation has sharply dropped from its record peak of 10.6 percent in October 2022 after Russia’s attack on Ukraine sent energy prices soaring.
With inflation under control, the ECB has moved to cut interest rates to boost the eurozone’s sluggish economic growth.
With eurozone inflation hovering around the ECB’s two percent target, the central bank is anticipated to maintain rates at its upcoming meeting.
However, depending on how US President Donald Trump’s tariffs impact the European economy, some experts believe that might alter.
The bloc’s economic growth may be hampered by the agreement reached between Washington and Brussels to impose 15% customs taxes on the majority of EU goods entering the US.
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