Eurozone Core Inflation Rises to 2.5%, Stiffening ECB's Path

The Eurozone's core inflation rate rose to 2.5% in July, beating expectations and adding pressure on the European Central Bank (ECB) to maintain a cautious stance.

This is the first uptick in several months, suggesting that underlying inflationary pressures remain sticky, particularly in services where wage growth and tourism demand are driving prices up.

The ECB has already cut interest rates once this year, but a sustained rise in core inflation could delay further easing. Market participants now see a reduced probability of a rate cut in September, as the data suggests that the 'last mile' to the 2% target remains challenging.