July's provisional inflation data were stronger than expected. Consumer prices rose 0.4 percent on the month, double the market consensus and enough to nudge the annual inflation rate a tick higher to 1.7 percent, it strongest reading since April.
The flash HICP similarly increased 0.4 percent versus June and was 1.5 percent above its level a year ago, unchanged from last time.
The unexpected acceleration in annual CPI inflation came courtesy of the goods sector, where the rate climbed 0.2 percentage points to 1.7 percent, and energy, which saw a nine tick gain to 0.9 percent. By contrast, services were only flat at 1.7 percent and rent, excluding utilities steady at 1.8 percent. Food was 0.1 percentage points lower at 2.7 percent.
Today's report suggests broadly stable underlying German inflation last month which, in turn, increases the likelihood of a similar outcome for the full Eurozone report (due on Monday).