Eurozone Inflation Steady At 2% ECB Target
(RTTNews) - Euro area consumer price inflation was unchanged at the European Central Bank's 2 percent target in July, easing the pressure for more easing.
The harmonized index of consumer prices increased 2.0 percent year-on-year in July, the same rate of increase as seen in June. Inflation was forecast to ease marginally to 1.9 percent.
Core inflation that excludes prices of energy, food, alcohol and tobacco also remained stable in July, at 2.3 percent.
Among main categories of HICP, prices of food, alcohol and tobacco registered a faster growth of 3.3 percent following a 3.1 percent rise. Growth in non-energy industrial goods prices increased to 0.8 percent from 0.5 percent.
Meanwhile, energy prices fell 2.5 percent after a 2.6 percent drop and services inflation eased to 3.1 percent from 3.3 percent.
In July, the ECB kept the deposit rate unchanged at 2.00 percent as policymakers assessed that prices pressures continued to ease. The bank had cut interest rates by a quarter basis points each in every rate-setting session since last September.
At the July press conference, ECB President Christine Lagarde emphasized that both the eurozone and the central bank are in a good place at the moment.
Steady inflation confirmed that the eurozone is in Lagarde's "good place" at the moment, ING economist Bert Colijn said. The economist expects inflation to remain around the 2 percent target for the months ahead.
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