Eurozone Inflation Hits 2.9%, Fueling Case for ECB Rate Hike

The Eurozone's inflation rate ticked up to 2.9% in July, following a 0.1 percentage point increase from June. This rise was largely driven by high oil prices, which have been exacerbated by the ongoing war in Iran.

The figure of 2.9% is in line with market expectations and adds weight to the case for another interest rate hike by the European Central Bank (ECB). Policymakers at the ECB have strongly signaled that a rate increase is imminent, citing the economy's performance along its 'baseline' scenario.

The ECB has argued that a rate hike is necessary to combat high energy prices from seeping into broader price and wage setting. The bank has also pointed to the economy's relatively strong growth, which expanded by 0.4% in the second quarter, defying gloomy forecasts of recession.