Inflation rises to near 9% in July, above expectations and underlining the task at hand for the ECB.
Eurozone inflation accelerated again in July, further underlining the task the European Central Bank has in controlling spiralling prices. The year-on-year rate, again driven by rising energy costs, rose 8.9%, up from 8.6% in June, a preliminary report from Eurostat shows, outpacing market expectations of an increase to 8.7%. On the month, prices rose by 0.1%.
Core inflation, which excludes energy, food, alcohol and tobacco, also rose in July, rising 4.0% y/y -- reversing a modest deceleration seen in June. Across the region, the Baltic states were all looking at 20%+ annual inflation rates.
The European Central Bank hiked its key interest rates by 50 bps just last week to help address the surge in prices -- along with stronger than expected Q2 growth -- and further increases are expected later this year, with a possible further 50 bps hike in September.