Investing.com - Inflation in the euro zone unexpectedly accelerated in July, underlining the case for the European Central Bank to wind down its asset purchase program this year.
The bloc’s statistics agency Eurostat said its consumer price index rose 2.1% in July from the same month a year earlier, compared to expectations for a reading of 2%.
Core, or underlying inflation, which strips out volatile items such as energy and food, picked up to an annual rate of 1.1% from 0.9% in the previous month.
The ECB targets inflation of close to but just under 2%.
Last week the ECB left interest rates on hold and confirmed plans to wind up its massive bond purchasing stimulus program in December.
ECB President Mario Draghi also delivered a confident assessment of the recovery in the euro area.
“While uncertainties, notably related to the global trade environment, remain prominent, the information available since our last monetary policy meeting indicates that the euro area economy is proceeding along a solid and broad-based growth path,” he said.
He also reiterated that the ECB needs to be “patient, persistent and prudent” in its policy to ensure that inflation remains on a sustained adjustment path.
At the same time, a separate report showed that growth in the euro area economy slowed slightly in the second quarter, adding to the view that the region’s economy has shifted into a lower gear for now.
Additional data also showed that the unemployment rate in the euro zone held steady at 8.3% in July, its lowest level since December 2008.