Eurozone Inflation Hits 2.9 Percent Amid Rising Energy Costs

The Eurozone inflation rate increased to 2.9 percent in July, up from 2.8 percent in June, due to rising energy prices caused by the war in the Middle East. According to data released on July 31 by the EU's statistics agency, this figure is still above the European Central Bank's target of two percent. ECB chief Christine Lagarde warned that the energy shock from the US-Iran conflict could worsen further.

The Eurozone's core inflation rate, which excludes volatile food and energy prices, also rose to 2.5 percent in July, up from 2.4 percent last month. Energy prices increased by 10 percent in July, while food and drink inflation slowed down to 1.2 percent this month.

The European Central Bank kept its key deposit rate unchanged on July 23 but left the door open for a potential increase in September due to rising tensions in the Middle East. The US and Iran have been trading military attacks, although Pakistan's mediation efforts are ongoing.