Inflation in the eurozone remained unchanged at 2.0% in July, defying market expectations of a slight decline, according to data released by Eurostat on Friday.
The figure aligns with the European Central Bank’s inflation target, despite forecasts from Bloomberg and FactSet predicting a drop to 1.9%.
Core inflation—which excludes energy, food, alcohol, and tobacco—also held steady at 2.3%, reflecting persistent price pressures across key sectors.
Energy prices dipped by 2.5% year-on-year in July, marginally less than June’s 2.6% drop, while food and beverage inflation accelerated to 3.3%. Conversely, services inflation eased to 3.1%, down from 3.3% in June.
With inflation retreating from its October 2022 peak of 10.6%, the ECB has begun easing interest rates to stimulate sluggish economic growth. Analysts expect rates to remain unchanged in the short term.
However, fresh uncertainty looms over the bloc’s economic outlook following new US tariffs under President Donald Trump. Washington recently reached a deal with Brussels imposing 15% duties on most EU exports to the US, a move economists warn could hamper eurozone recovery.
