Eurozone consumer prices increased 2.9% in the 12 months to July, accelerating from a 2.8% rise in June, according to final data from Eurostat released on Wednesday. The monthly measure rose 0.2%, matching the preliminary estimate.
Underlying price pressures remained contained, with the EU-harmonized core inflation rate—excluding volatile food and energy items—holding at 2.2% year-on-year. The ECB’s preferred core gauge, which strips out all energy, food, alcohol and tobacco, climbed to 2.5% from 2.4% in June, while the monthly increase slowed to 0.0% from 0.2% previously.
The 21-member euro area’s inflation trajectory remains a key focus for the European Central Bank, which left interest rates unchanged at its July policy meeting. ECB officials have indicated that the July data will inform their September deliberations, with policymakers balancing persistent price pressures against concerns over growth momentum. The central bank has warned that "uncertainty remains high" regarding the potential economic fallout from the Iran conflict, noting that the full impact of any energy supply disruption "has yet to play out."
The eurozone economy expanded 0.4% in the second quarter, accelerating from 0.3% growth in the first three months of the year, adding to signs of resilience despite tighter monetary policy. Market pricing suggests investors are increasingly anticipating further ECB rate hikes in the coming months, driven in part by the combination of firmer inflation and steady economic activity.
