Euro Area July Inflation Preview

Economics Research 24 July 2026 | 6:38PM BST

Euro Area July Inflation Preview

BOTTOM LINE: We expect Euro area headline HICP inflation to increase to 2.88%yoy Katya Vashkinskaya | in July from 2.75%yoy in June and core HICP inflation to go up to 2.46%yoy in the Goldman Sachs International flash release to be published on Friday, 31 July. We see services inflation printing at 3.35%yoy, and core goods inflation moving up to 0.80%yoy. Year-over-year energy inflation will likely increase to 9.7%yoy from 8.5%yoy in June. Our estimates suggest that seasonally adjusted sequential core inflation will tick up to 0.25%mom in July, after printing at 0.13%mom in June. This reflects an increase in sequential core goods inflation to 0.12%mom and to 0.32%mom for sequential core services inflation. The volatility in energy prices in light of the ongoing conflict in the Middle East has had a notable impact on our inflation forecast. We recently updated our forecast to reflect our commodity analysts’ updated oil and gas forecasts. We continue to expect core inflation to peak at 2.7%yoy in 2027Q1 before gradually declining to 2.0%yoy in 2028Q4. As for headline inflation, we continue to see the peak of 3.4%yoy in 2026Q4.

1. The flash estimate of the Euro area Harmonised Index of Consumer Prices (HICP) for July will be released on Friday, 31 July. We expect Euro area headline HICP inflation to increase to 2.88%yoy in July from 2.75%yoy in June (Exhibit 1).

2. Breaking down the overall index by components, we anticipate that:

n Core inflation—headline inflation excluding energy, food, alcohol and tobacco— will go up to 2.46%yoy in July compared with 2.36%yoy in June. o Within core inflation, we expect services inflation to increase to 3.35%yoy and core goods inflation to move up to 0.80%yoy. n Year-over-year energy inflation will likely increase to 9.7%yoy from 8.5%yoy in June, although uncertainty remains high. n Food, alcohol, and tobacco inflation is likely to decline to 1.3%yoy in July.

3. Across individual countries:

n We look for German headline HICP inflation to rise to 2.9%yoy in July from 2.4%yoy in June, and core inflation to tick up to 2.7%yoy from 2.5%yoy in June, driven by a rebound in the year-over-year rate of services inflation and broadly unchanged core goods inflation. We see airfares printing at 11.6%mom nsa, with risks for a somewhat weaker print (as short-haul flights prices are still reported to be down in year-on-year space in Europe), expect package holidays at

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to

11.2%mom nsa, and accommodation services at around 1%mom nsa. We see garments and footwear declining on the month, broadly in line with last year. Of the non-core components, we expect energy inflation to increase to 7.6%yoy from 2.7%yoy in June, driven by notably higher pressures in fuel prices, as the transportation fuels rebate introduced on May 1 expired. We look for processed food inflation to tick down to -0.1%yoy and unprocessed food inflation to decline to 2.5%yoy. n We expect French headline inflation to tick up to 2.1%yoy in July from 2.0%yoy in June, and core inflation to move up 0.1pp to 1.3%yoy, reflecting an increase in both core goods and services inflation on a year-over-year basis. We expect an 11.8%mom nsa increase in accommodation services, with the seasonality resembling 2025, a 27.7%mom nsa increase in airfares, after somewhat weaker than expected June, and a 13%mom nsa increase for package holidays, also roughly following the usual July seasonality of the past several years. Outside of core, we look for energy inflation to tick down to 10.9%yoy from 11.0% in June, with downward pressure coming from further easing in fuel prices broadly offset by a 7.4% increase in regulated gas prices. We look for processed food inflation to decline to -0.2%yoy and unprocessed food inflation to decline to 3.3%. n We expect Italian headline inflation to decline to a strong 2.8%yoy in July from 3.0%yoy in June, and core inflation to move sideways at 1.7%yoy, reflecting marginal…