Flash Inflation In-Line With Tracking; Services Softens But Only Slightly

Eurozone July flash headline printed in-line with MNI's tracking estimate at 2.6% Y/Y (vs 2.5% cons; 2.5% prior) and 0.0% M/M (vs -0.1% cons; 0.2% prior). On an unrounded basis, headline was 2.59% Y/Y and -0.02% M/M.

• Core HICP also printed a tenth above consensus on a rounded basis, remaining at 2.9% Y/Y for the third consecutive month (vs 2.8% cons; 2.9% prior), but with the surprise boosted by rounding. On an unrounded basis, core was 2.86% Y/Y and -0.15% M/M.
• Looking at the individual categories, services inflation fell slightly to 4.0% Y/Y after two months at 4.1% but is yet to show signs of meaningful further disinflationary progress having plateaued at an average 4.0% Y/Y since November.
• Non-energy industrial goods inflation rose slightly to 0.8% Y/Y (vs 0.7% prior).
• Energy price inflation meanwhile increased as expected, up to 1.3% Y/Y (vs 0.2% prior) as downward base effects have faded.
• At a country level, annual HICP fell in 8 countries, rose in 11 countries, and was unchanged for Ireland.

Source: Eurostat, MNI