Eurozone Core Inflation Unexpectedly Holds

The annual core inflation rate in the Euro Area, which excludes prices for energy, food, alcohol, and tobacco, was at 2.3% for the fourth consecutive time in August of 2025, according to a preliminary estimate.

The result was marginally ahead of market expectations that it would ease to 2.2%.

Despite remaining at the lowest level since October 2021, the lack of a slowdown could fragment opinions of monetary policy response between dovish and hawkish members of the ECB Governing Council, with current expectations loosely split between a rate cut this year.