Euro area inflation slows in July, with yearly pace easing to 5.3%
The euro zone saw annual inflation retreat to 5.3 percent in July, the softest increase in consumer prices since January 2022. Month-on-month gains held at 0.3 percent, with overall euro area inflation reported at 5.5 percent for the period (Eurostat). Within the European Union, the yearly inflation rate cooled to 6.1 percent in July from June, marking the smallest price rise since early 2022 (Eurostat).
The slowdown in euro area inflation is largely driven by a marked drop in energy costs, which fell 6.1 percent year over year in July after a 5.6 percent decline in June. By contrast, fresh food prices rose, increasing 9.2 percent year over year, partly offsetting the energy relief (Eurostat).
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In the services sector, prices advanced 5.6 percent from a year earlier, edging up by two tenths from May. Non-energy industrial goods also rose, around 5 percent, and stood roughly half a percentage point below the previous month (Eurostat).
Removing energy from the calculation, the annual inflation rate moved from 6.9 percent in June to 6.7 percent in July. Food, alcohol and tobacco costs remained steady around 5.5 percent (Eurostat).
Across the twenty-seven EU member states, the lowest annual inflation was recorded in Belgium at 1.7 percent, followed by Luxembourg at 2.0 percent and Spain at 2.1 percent. The sharpest increases occurred in Hungary at 17.5 percent, with Slovakia and Poland both near 10.3 percent (Eurostat).
The harmonized inflation rate in Spain rose to 2.1 percent in July, narrowing the gap with the euro area average from 3.9 percent in June to 3.2 percent in July (Eurostat).