Eurozone inflation edges up to 2.6% in July

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Eurozone inflation increased slightly to 2.6 per cent in the year to July, amid expectations that the European Central Bank will cut interest rates for the second time this year at its September meeting.

The figure is higher than the 2.5 per cent increase in the year to June. Economists polled by Reuters had anticipated price pressures to remain flat at 2.5 per cent.

The news comes as investors expect the ECB, which was the first major central bank to cut rates from record highs in the wake of the pandemic, to lower borrowing costs for a second time at its next meeting in September.

In June, the central bank lowered its benchmark deposit rate from 4 per cent to 3.75 per cent in anticipation of inflation hitting its 2 per cent target by next year.

This is a developing story.