Eurozone Inflation Hits 2.9% as ECB Weighs Rate Hike

The European Central Bank (ECB) is facing a tough decision as eurozone inflation rose to 2.9 per cent in July, exceeding its 2 per cent target.

This increase in inflation strengthens the case for another ECB rate hike in September, complicating hopes that energy relief would ease pressure on households and firms quickly.

The rebound in inflation is attributed to rising energy prices, which remain sensitive to Middle East tensions, as well as services inflation, suggesting that the problem is not confined to headline energy prices.