Inflation in Eurozone is expected to remain around ECB’s 2% target for the rest of 2025. Core inflation forecasted at 2.5% in August, slightly higher than July. Experts suggest ECB rate cut in September is unlikely due to trade agreements lowering inflation risks. Services inflation was the main driver in July.

Nonenergy industrial goods remain interesting with companies using euro’s strength to maintain margins. Headline inflation expected to stay near 2% target for 2025. No major shocks expected, with temporary drops potentially due to energy prices. ECB Wage Tracker predicts wage growth below 3% in Q1 2026, impacting services inflation.

Markets predict low likelihood of ECB rate cut in September. Lower bond yields in eurozone and falling ECB rates have led to reduced expectations. ECB not expected to intervene in sovereign bond market despite debt concerns in countries like France. ECB likely to hold rates in September and maintain data-dependent approach.

Swap markets indicate minimal probability of another ECB rate cut in 2025, leaning towards a pause in September and potential small move later in the year. ECB expected to hold rates at next meeting on Sept. 11. Expert analysis suggests ECB in neutral territory with possible quarter-point cut if eurozone economy weakens.

Read more at Morningstar: What to Expect From August’s CPI Data