Inflation across the euro area rose marginally in July but the increase is not expected to deter the European Central Bank (ECB) from cutting interest rates next month.
Consumer prices in the single currency zone rose 2.6 per cent in July, up from June’s 2.5 per cent rate, the EU’s statistics agency Eurostat said.
The figure was above the ECB’s target rate of 2 per cent.
The latest figures indicated core inflation, which strips out volatile energy and unprocessed food prices, (a key consideration for ECB rate setters) was unchanged at 2.8 per cent.
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Frankfurt is expected to cut interest rates again next month but strong wage data and still-sticky pricing pressures particularly in the services sector have clouded the outlook for further rate cuts.
The latest Eurostat data indicated services recorded the biggest price rise in July at 4 per cent, 0.1 per cent down on the previous month.
[ Inflation steady at 2.2 per cent in JulyOpens in new window ]
The primary contributors to the annual euro area inflation in July were services (1.82 percentage points), followed by food, alcohol and tobacco (0.45 percentage points), non-energy industrial goods (0.19 percentage points) and energy (0.12 percentage points).
The data indicated Irish inflation, as measured by the harmonised consumer price index (HICP), was 1.5 per cent in the 12 months to the end of July.
The lowest annual rates across the bloc were recorded in Finland (0.5 per cent), Latvia (0.8 per cent) and Denmark (1 per cent). The highest annual rates were recorded in Romania (5.8 per cent), Belgium (5.4 per cent) and Hungary (4.1 per cent).
Compared with June 2024, annual inflation fell in nine member states, remained stable in four and rose in 14.
Separately Central Statistics Office figures indicate the volume of production in the building and construction sector here rose by 1.7 per cent in the second quarter of 2024.
However, the volume of output in the residential building sector was down 1.3 per cent, which is keeping with other barometers pointing to a fall-off in homebuilding earlier this year
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