MNI BRIEF: Euro Area Inflation Rate Unchanged In July

Euro area headline annual inflation was unchanged in July, sitting right on the ECB's 2% medium-term target, data released by Eurostat Friday showed.

Headline inflation was flat month on month, while the closely watched core reading fell 0.2% m/m for an annual reading of 2.3%. Services inflation, often seen as a proxy for domestic inflation, slowed to an annual rate of 3.1% in July.

The ECB is confident that inflation will be at 2% over the medium term, although it accepts it could fall as low as 1.4% in the first half of 2026. (see MNI SOURCES: Markets Overplaying ECB's Hawkish Shift )