Eurozone Inflation Hits 2.9% in July, Boosting Rate Hike Case

The Eurozone's inflation rate ticked up to 2.9% in July from 2.8% in June, as high oil prices drove the increase. The Iran war-induced surge in oil prices is expected to foreshadow a further broadening of price pressures.

The more closely watched underlying inflation figure, which filters out volatile food and energy prices, accelerated to 2.5% from 2.4%. Services inflation rose to 3.3%, contributing to the increase.

The European Central Bank (ECB) has strongly signaled that a rate hike is coming, arguing that the economy is performing along its 'baseline' scenario, which itself was predicated on a rate hike in September. The ECB's policymakers will get another inflation print in August before their next rate meeting.