Eurozone inflation remains consistent at a rate of 2.0% in July
The European Central Bank (ECB) reported that the inflation rate in the Eurozone remained stable at 2.0% in July, according to a first estimate by Eurostat. This figure matches the ECB's target and has been consistent since June.
The recent trends in core inflation, excluding energy, food, alcohol, and tobacco prices, have shown a steady pace. This rate remained at 2.3% year-on-year in both June and July, marking the lowest level since January 2022 and indicating a stabilization around the ECB's inflation target area.
Contrary to the steady core inflation, energy prices decreased by 2.5% in July. This decrease is in contrast to the upward trend seen in services, food, alcohol, and tobacco prices, which increased by 3.3% in July.
The ECB closely monitors core inflation as it indicates underlying inflation trends. The bank aims for a medium-term target of 2.0% inflation, considering this rate optimal for the economy in the euro area.
Inflation for services in the Eurozone decreased from 3.3% in June to 3.1% in July. Food, alcohol, and tobacco prices also increased in July, but at a lower rate than June, reaching 3.3%.
Overall consumer price inflation in the Euro area rose slightly to 2.0% year-on-year in June from 1.9% in May and held at 2.0% in July. Services inflation was relatively strong, accelerating slightly in June to 3.3%, though it dipped to 3.1% in July, while prices for non-energy industrial goods remained subdued.
The first estimate of inflation for July was released by Eurostat on Friday. The steady core inflation rate reflects underlying price pressures excluding volatile categories, signaling moderate but persistent inflation across services and industrial goods in the Eurozone economy.
Inflation in the Eurozone has remained stable for two consecutive months (June and July), providing a positive outlook for the region's economic stability. The ECB will continue to closely monitor these trends to ensure that inflation remains within the target range and does not deviate from the optimal level for the economy.
[1] Eurostat (2025). Harmonised Index of Consumer Prices (HICP) - Euro area. [Online]. Available: https://ec.europa.eu/eurostat/web/hicp/data/database
[3] European Central Bank (2025). Monthly report - July 2025. [Online]. Available: https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp2335.en.pdf
[4] Reuters (2025). Eurozone inflation steady at 2.0% in July. [Online]. Available: https://www.reuters.com/business/europe/eurozone-inflation-steady-2-0-july-2025-08-05/
The European Central Bank (ECB) might consider revising its community policy to address potential impact of inflation on employment. With the steady core inflation rate and stable overall consumer price inflation for two consecutive months, there could be an improvement in the employment outlook.
The ECB, in its monthly report, has highlighted the need for an employment policy that aligns with the financial limits of the Eurozone economy, given the marginal increase in services inflation and the overall stable inflation rate. This policy revision could aim to stimulate employment and ensure economic growth remains within the optimal range.
