Eurozone Inflation Surges to 2.9% as Energy Costs Bite

The Eurozone's inflation rate has seen a significant increase in July, reaching 2.9 per cent according to preliminary figures released by Eurostat on July 31st.

This is an uptick from June's level of 2.8 per cent and marks the first time this year that inflation has increased rather than decreased.

European Central Bank President Christine Lagarde had expressed concerns earlier in the year about the impact of the energy shock on inflation, and it appears these fears are now being realized.

The 'energy' component of the reference basket is expected to reach 10 per cent in July, compared with 8.5 per cent in June.

Meanwhile, non-energy industrial goods saw a slight increase (0.9 per cent) and services also rose by 3.3 per cent.

However, food prices bucked the trend, falling from 1.5 per cent to 1.2 per cent.