Eurozone Inflation Rises to 2.9% Amid High Oil Prices

The Eurozone inflation rate ticked up to 2.9% in July, as expected, driven by high oil prices caused by the Iran war. This increase adds to the already strong case for another European Central Bank interest rate hike.

Inflation in the 21 nations sharing the euro currency picked up from 2.8% a month earlier, with services inflation rising to 3.3%. The underlying inflation figure, which filters out volatile food and energy prices, accelerated to 2.5% from 2.4%.

Although the July figures are unlikely to be a dealbreaker for the ECB, policymakers will get another inflation print in August before their next rate meeting. The central bank has strongly signaled that a rate hike is coming, arguing that the economy is performing along its 'baseline' scenario.