Eurozone core inflation holds steady in July

Consumer prices in the Eurozone edged slightly higher in July, data released on Friday showed.

According to the European Union’s statistics agency, consumer prices in July rose 0.2% year-on-year, falling short of the European Central Bank’s target of just under 2%.

Energy prices declined 5.6% year-on-year, while excluding prices for energy, food and alcohol, the core annual rate rose from 0.8% to 1.0%.

The Eurozone’s recovery is expected to continue in the second quarter, although it is proceeding at a much slower pace than expected, indicating the ECB’s bond buying programme is yet to deliver the desired results.

Today’s data provide further justification for the ECB to complete its quantitative easing programme in full and we still suspect that additional monetary policy support will be needed to bring inflation anywhere near target,” said James Howat, European economist at Capital Economics.