Preliminary data published by Eurostat showed that the eurozone annual inflation accelerated in July, contrary to expectations of further decline. Meanwhile, core inflation remained unchanged, while economists had expected a slight decline. Overall, the July data is likely to reinforce concerns among some ECB policymakers that domestic price pressures may remain high. These data may also influence the ECB's decisions on possible interest rate cuts in the future. At its July meeting, the ECB left rates unchanged, but indicated the possibility of further easing monetary policy at a meeting in September.
According to the report, the consumer price index rose by 2.6% per year after increasing by 2.5% per year in June. Economists expected an increase of 2.4%. Meanwhile, on a monthly basis, the consumer price index remained unchanged after rising 0.2% in June.
Eurostat reported that the core consumer price index - excluding energy, food, alcohol & tobacco - rose by 2.9% per year, as in June. Economists had expected an increase of 2.8% per annum.
The data showed that the annual growth of the overall consumer price index was due to an increase in the cost of services (+4.0% vs. +4.1% in June), food, alcohol & tobacco (+2.3% vs. +2.4%), energy (+1.3% vs. +0.2%) and non-energy industrial goods (+0.8% vs. +0.7%).