Customers are standing in front of a fruit and vegetable stall at a Paris outdoor market on July 15, 2025.
Behrouz Mehri | AFP | Getty Images
Eurozone inflation remained unchanged at a higher than expected 2% in July.
Economists voted by Reuters had expected this figure to reach 1.9% after a 2% read in June.
Data on Friday showed that in July, the so-called core inflation, which stripped the prices of more volatile food, energy, alcohol and tobacco, reached 2.3%.
Meanwhile, after picking up just 3.3% in June, service printing was relaxed to 3.1% in July.
Following the release of the data, the yield on Germany’s 10-year bonds was above multiple base points, while the yield on France’s 10-year bonds rose below one basis point.
Looking ahead, fresh inflation data does not suggest that the European Central Bank will ease the cycle of interest rates anytime soon, Jack Allen Reynolds, Associate Chief Eurozone Economist in Capital Economics, said in a memo.
The ECB at its July meeting was stable for the first time this year. According to LSEG data, the market is 94% or more likely to continue to change when the last pricing meets in September as well.
Allen-Reynolds added that eurozone inflation could actually fall below the 2% ECB target for the second half of this year and next year, depending on energy prices.
“However, I suspect that the undershoot should be very low and that the core inflation rate will remain near 2%. And given the ECB policymakers are satisfied with their current monetary policy stance, I suspect that a slight drop in inflation due to lower energy prices is sufficient to encourage another interest rate cut,” he added.
Inflation numbers followed in the footsteps of the signs earlier this week, showing that Euro Zone Economy would expand by 0.1% more than expected in the second quarter.
Analysts have interpreted the data so far as a European economy showing resilience in the face of President Donald Trump’s tariff policy. The European Union and Washington have recently chopped trade agreements that include baseline collection of 15% of EU goods bound by US sector tariffs, temporarily reducing so-called mutual obligations.
The job is widely expected to weigh economic growth, including the eurozone, and affect the prices of US consumers’ products. The impact on European inflation remains uncertain.
