Commenting on today’s Eurozone inflation data, Irene Lauro, Eurozone Economist at Schroders, said:
“Eurozone core inflation remains firmly above the ECB’s 2% target, highlighting persistent price pressures while headline inflation was up to 2.1% year-on-year, from 2% in July. Flat core goods inflation suggests the stronger euro has yet to pass through to consumers, while services inflation decelerated only slightly, as the labour market remains tight.
“With trade uncertainty easing, the Eurozone recovery is set to gain momentum as firms ramp up borrowing and investment. In this environment, the ECB is likely to hold rates cautiously steady in September. The resilience in core inflation supports our view that policy normalisation has ended, and the ECB will closely monitor growth dynamics before making its next move.”
