Euro zone inflation rises to 2.6% in July

Brussel: The euro zone saw an unexpected increase in headline inflation to 2.6 percent  in July, as reported by the European Union's statistics agency on Wednesday. This rise occurred despite a slight easing in price growth within the services sector.

June's inflation rate was recorded at 2.5 percent, a marginal decrease from May's 2.6 percent . Economists surveyed by Reuters had anticipated that July's headline inflation would remain steady at 2.5 percent.

Core inflation, which omits volatile items such as energy, food, alcohol, and tobacco, reached 2.9 percent in July, slightly above the 2.8 percent forecast by Reuters. This figure matched the core inflation rate of 2.9 percent recorded in June.

Services inflation, a closely monitored indicator, dropped to 4 percent in July from 4.1percent n in June.

These inflation figures were released just a day after the euro zone's second quarter GDP data, which indicated a 0.3 percent growth from April to June. This surpassed the 0.2 percent growth anticipated by economists polled by Reuters, despite Germany, the largest economy in the euro zone, reporting a 0.1 percent contraction.

Investors are now evaluating how this new data might influence the European Central Bank's (ECB) future interest rate decisions. The ECB maintained steady rates earlier this month after a reduction in June and hinted at the possibility of another cut in September. The ECB Governing Council emphasized that their decisions would be guided by the dynamics and outlook of inflation, as well as the effectiveness of monetary policy transmission, and clarified that they were "not pre-committing to a particular rate path."