• July final CPI +2.9% vs +2.9% y/y prelim
• Prior +2.8%
• July final core CPI +2.5% vs +2.5% y/y prelim
• Prior +2.4%

This just confirms that inflation pressures in the euro area did pick up a little in July, keeping ECB policymakers on their toes ahead of the September decision next month.

The breakdown on headline inflation contribution is as such:

• Services +1.55%
• Energy +0.94%
• Non-energy industrial goods +0.23%
• Food, alcohol, and tobacco +0.23%

As a whole, there were mostly increases in all broad categories of inflation. Services inflation was seen up to 3.3% in July compared to 3.2% in June. Meanwhile, energy price inflation pushed up to 10.3% in July compared to 8.5% in June. It is only food price inflation that eased slightly to 1.2% in July compared to 1.5% in June.

With core annual inflation continuing to keep above 2%, there is still work to be done with the threat of second-round effects remaining ever present. The ECB is likely to hike again in September to better position themselves for the need to raise interest rates further, should those risks materialise.