German inflation remained unchanged in July, preliminary data showed today, as euro zone rate-setters mull their next steps after keeping interest rates on hold last week following a string of cuts.
Annual inflation in Europe’s top economy came in at 2%, according to preliminary data from federal statistics agency Destatis.
That was higher than the 1.8% expected by analysts polled by financial data firm FactSet.
Compared to the previous month, prices rose 0.3%, federal statistics office Destatis said.
Goods inflation notched up a small rise while services inflation slowed a little, Destatis said.
The inflation figure will reassure rate-setters at the European Central Bank that overall euro area inflation is on the right track.
Germany is the euro zone’s largest economy by some distance, accounting for about a quarter of its GDP.
The ECB kept its key deposit rate unchanged at 2% at its last meeting in July, ending a streak of cuts stretching back to September 2024.
The central bank is widely expected to keep rates unchanged at its next meeting while euro zone inflation is around the ECB’s 2% target.
Some analysts nevertheless see room for a possible September cut if tariffs imposed by US President Donald Trump end up cooling Europe’s economy and causing cheap exports to be sent to the continent instead of the US.
