- July final CPI +2.9% vs +2.9% y/y prelim
- Prior +2.8%
- July final core CPI +2.5% vs +2.5% y/y prelim
- Prior +2.4%
This just confirms that inflation pressures in the euro area did pick up a little in July, keeping ECB policymakers on their toes ahead of the September decision next month.
The breakdown on headline inflation contribution is as such:
- Services +1.55%
- Energy +0.94%
- Non-energy industrial goods +0.23%
- Food, alcohol, and tobacco +0.23%
As a whole, there were mostly increases in all broad categories of inflation. Services inflation was seen up to 3.3% in July compared to 3.2% in June. Meanwhile, energy price inflation pushed up to 10.3% in July compared to 8.5% in June. It is only food price inflation that eased slightly to 1.2% in July compared to 1.5% in June.
With core annual inflation continuing to keep above 2%, there is still work to be done with the threat of second-round effects remaining ever present. The ECB is likely to hike again in September to better position themselves for the need to raise interest rates further, should those risks materialise.
This article was written by Justin Low at investinglive.com.