Eurozone inflation ticks up to 2.9% on energy
Flash HICP rose from 2.8% to 2.9%. Energy inflation accelerated to 10.0%. Core moved higher too. The ECB’s next decision just got a little more complicated.
Eurostat’s flash estimate for July showed the expected rebound. Headline inflation in the euro area accelerated to 2.9% from 2.8% in June. The driver was energy: the annual rate jumped from 8.5% to 10.0% as the renewed US–Iran hostilities kept oil prices elevated.
Core inflation also edged higher, from 2.4% to 2.5%. Services inflation rose to 3.3% from 3.2%. Food continued to cool to 1.2%. Among the large economies the pattern was mostly higher: Germany 2.8%, France 2.4%, Spain 3.8%, Netherlands 2.9%.
One more inflation print arrives before the next ECB meeting. Oil remains the dominant near-term variable. If energy prices stay elevated, the case for another hike stays alive. The July flash does not force the ECB’s hand, but it removes any residual hope that the disinflation path was cleanly re-established in June.