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last mo.

German Inflation Stabilizes at ECB’s 2 Percent Target in July

Rising service costs alongside food price increases offset falling energy costs.

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Image
Eine Frau beim Einkaufen in einem Supermarkt
Kundinnen stehen an einem Stand in der Markthalle Stuttgart.

Overview

  • Germany’s consumer price index held steady at 2.0% year-on-year in July, matching June’s rate and exactly aligning with the ECB’s long-term goal.
  • Service prices climbed by 3.1% and food costs rose by 2.2%, the largest upward contributors to overall inflation.
  • Energy prices fell by 3.4% compared with July 2024, exerting downward pressure on the headline rate.
  • Core inflation excluding food and energy remained elevated at 2.7%, signaling persistent underlying price pressures.
  • The ECB paused its rate-cut cycle after seven consecutive cuts and signaled it will stay data-dependent