Eurozone consumer prices rose by 2% year over year in July, meeting expectations. Core inflation remained stable at 2.3%, while services inflation dropped to its lowest level in three years at 3.1%. The odds of another rate cut at the September ECB meeting are decreasing.

In Spain, headline inflation was above expectations at 2.7% in July, with core inflation at 2.3%. French and Italian headline inflation also surpassed forecasts. German headline HICP inflation slightly missed expectations at 1.8%, with stable core inflation at 2.7%.

Eurozone economy grew by 1.4% year over year in Q2, with GDP increasing by 0.1% quarterly. Italy and Germany saw a 0.1% contraction, while Spain recorded a 0.7% increase and France was up 0.3%. Trade agreement risks may impact future growth, but the risk of a recession is low.

The ECB’s next meeting is in September, with expectations of another rate cut decreasing due to stable inflation. Market analysts suggest reduced odds of a rate cut, given inflation meeting targets. ECB held interest rates unchanged in July.

Read more at Morningstar: Eurozone Inflation Stable at 2%