Euro zone inflation, July 2024

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Euro zone inflation, July 2024

People shopping at the downtown market, Cour Lafayette, in Toulon, on July 27, 2024.

Magali Cohen / Hans Lucas | Afp | Getty Images

Headline inflation in the euro zone unexpectedly rose to 2.6% in July, the ********* Union’s statistics agency said Wednesday.

In June, inflation had come in at 2.5%, easing slightly from the 2.6% of May. Economists polled by Reuters had been expecting the headline figure for July to be unchanged from June’s reading at 2.5%.

Core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, hit 2.9% in July, versus a Reuters estimate of 2.8%. The figure compared with a core print of 2.9% in June.

The inflation rates come just a day after the release of the zone’s second quarter ****** domestic product, which the ********* Union’s statistics office said grew 0.3% in the three months to the end of June.

This was above the 0.2% growth that economists polled by Reuters had expected, and came even as the euro zone’s largest economy Germany reported a 0.1% contraction.

Investors will now weigh how the fresh data will impact the ********* Central Bank’s trajectory for potential future interest rate cuts. The ECB held rates steady when it met earlier this month after reducing them in June. At the time, it left open the option for another cut in September.

The ECB Governing Council said it would continue to consider the dynamics and

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of inflation, as well as the strength of monetary policy transmission in its decision-making. It stressed that was “not pre-committing to a particular rate path.”

This is a breaking news story and will be updated.

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