Eurozone inflation rises unexpectedly to 2.6%

(Sharecast News) - Eurozone prices increased marginally faster than anticipated in July, a development that might cause the European Central Bank (ECB) to reconsider its plans for further rate reductions.



Inflation within the single currency bloc increased to an annual rate of 2.6% in the year leading up to July, a rise from 2.5% in June, according to a flash estimate from Eurostat, the EU's statistical office.

It was also higher than the 2.4% expected by economists, and above the ECB's 2% target.

"The rise in headline CPI (is) the third such reading in the past six-months. The final stretch back down to 2% remains a difficult hurdle to overcome, and today's report will likely create jitters for those expecting a September rate cut that is currently being priced at a 68% chance," said Scope Markets analyst Joshua Mahony.

Reporting by Frank Prenesti for Sharecast.com