Eurozone Headline Inflation Jumps to 2.6% in July as European Central Bank Maintains Flexible Approach

Headline inflation in the Eurozone rose unexpectedly to 2.6% in July, above expectations. Core inflation, which excludes volatile items, rose above expectations, while inflation in the services sector slowed slightly. Inflation rates increased in Germany and France, the two largest Eurozone economies. Investors are evaluating how new data might influence the European Central Bank's future decisions regarding interest rate cuts, following a period of stable rates after a reduction in June. The ECB has indicated it remains flexible in its approach, focusing on inflation trends and the effectiveness of monetary policy without committing to a specific trajectory for future rates.