European Economic Perspectives: Eurozone: Inflation likely stable at 2.8% in July

Research evidence excerpt

European Economic Perspectives: Eurozone: Inflation likely stable at 2.8% in July

Global Research

20 July 2026ab

European Economic Perspectives Economics

Europe Ex. UKEurozone: Inflation likely stable at 2.8% in July

Anna Titareva

Economist

Encouraging inflation pull-back in June anna.titareva@ubs.com

+44-20-7568 5083

Encouraging broad-based easing in June HICP. We forecast headline inflation to remain

unchanged at 2.8% in July; the ECB to stay on hold this week. Reinhard Cluse

reinhard.cluse@ubs.com

Underlying inflation eases slightly in June +44-20-7568 6722

The final Eurozone HICP estimate for June (published on 17 July) confirmed a 0.4pp

Franziska Fischer

decline in headline inflation to 2.8% y/y (unrounded 2.75%) and a 0.2pp drop in core

inflation to 2.4% y/y. Encouragingly, the June release signalled some easing in franziska.fischer@ubs.com

underlying inflation, with exclusion measures, domestic inflation, supercore, PCCI, and +41-44-239 2054

trimmed means all declining or at least remaining stable (Fig. 1). Inflation breadth also

Felix Huefner

narrowed in June, with the share of items posting price increases above 2% falling by Economist

5.2pp to 48.5%, fully reversing May’s increase (Fig. 7). The monthly increase in non- felix.huefner@ubs.com

seasonally adjusted services inflation excluding travel-related items was also slightly +49-69-1369 8280

weaker than in recent years (Fig. 13). That said, the sequential monthly run rate for

services was unchanged at 0.2% m/m (swda), while the annualised 3m/3m rate of

seasonally adjusted inflation remained stable for a third consecutive month at 3.3% y/y.

On the goods side, the seasonally adjusted monthly run rate fell by 0.2pp to -0.1% m/m,

with the annualised 3m/3m rate edging down by 0.1pp to 1.3% y/y (Fig. 12).