Eurozone inflation up to 2.2% in July

Inflation in the eurozone increased year on year by 2.2% in July, according to early official estimates published on July 30.

If confirmed, inflation in the region would have resumed the upward trend it started in 2021. Inflation in the region increased from 0.9% in January to 2% in May. In June, it declined to 1.9%.

Across countries, Germany, the bloc’s largest economy, is expected to record 3.1% inflation. This is considerably above the 2% target adopted by the European Central Bank last month. But there is a wide gap between Germany and some other countries: in France inflation will stay at 1.6%, and in Italy at just 0.9%.

Energy prices were again the main factor pushing inflation upwards. Last month, they increased year on year by 14.1%, up from 12.6% in June.

In spite of this rapid increase, most officials expect inflation to gradually decrease and stay below the ECB target from 2022. In fact, ECB staff projections place inflation at just 1.4% in 2023.

The eurozone’s core inflation measure – excluding energy, food, alcohol and tobacco – is expected to have declined from 0.9% in June to 0.7% in July.