MNI Eurozone Inflation Preview – July 2024

Following June’s slight slowdown, July’s print (released Jul 31) is expected to see headline HICP remain steady at 2.5% Y/Y; core inflation meanwhile is expected to edge down 0.1pp to 2.8% - with a possible shift in underlying dynamics.

• For services inflation, which has held at around the same Y/Y rate over the last 7 months, the question is when, if at all, the long-anticipated disinflationary process will start. The ECB Governing Council has signalled high conviction in their view that a moderation of price pressures in the services category is only a matter of time, but at the same time has flagged elevated uncertainty about the timing and speed thereof given ongoing stickiness.
• Core goods meanwhile have been the major driver of core inflation in recent months, but their pace of disinflation has tapered off and could even see a temporary reversal going forward.
• Our preview includes analysis of price categories to watch, assessments of underlying inflation trends, outlooks for the French, German, Spanish, and Italian national inflation prints, and sell-side analyst previews.