Eurozone Inflation Rises to 2.9 Percent in July

Annual inflation in the eurozone rose to 2.9 percent in July 2026, up from 2.8 percent in June, while the overall European Union rate increased to 3 percent. Data from Eurostat shows that energy prices drove the largest annual increase at 10.3 percent, followed by services at 3.3 percent. Core inflation, which excludes energy, food, alcohol, and tobacco, also edged up to 2.5 percent from 2.4 percent in June.

Member state rates varied significantly across the bloc. Romania recorded the highest inflation in the European Union at 8.2 percent, despite a decrease from 9.2 percent in June. In Romania, services saw the sharpest price increases at 13.67 percent. Other high-growth countries included Lithuania at 5.4 percent, Cyprus at 4.4 percent, and Bulgaria at 4.4 percent, though Bulgaria's rate has gradually eased from 5.2 percent in June. Sweden reported the lowest inflation at 0.3 percent.

In response to these figures, the National Bank of Romania revised its year-end 2026 inflation forecast upward from 3.9 percent to 6.1 percent, citing supply shocks, the US-Iran war, and low Danube water levels. Meanwhile, the European Central Bank has maintained current interest rates but is expected to consider a rate hike in September to combat persistent inflation and potential second-round effects.