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A man walks past the Euro sculpture in Frankfurt, Germany, on March 11.Michael Probst/The Associated Press

Euro zone inflation accelerated to 2.2 per cent in July, its highest rate in nearly three years and above the European Central Bank’s target of 2.0 per cent, final data released on Wednesday by the EU statistics office showed, confirming its earlier estimate.

Eurostat said consumer prices in the 19-nation bloc rose 2.2 per cent in July on the year, after a 1.9 per cent rise in June. It was the highest rate since October 2018.

Month-on-month inflation in the bloc fell 0.1 per cent, in line with the mean forecast of economists polled by Reuters.

The ECB is forecasting a further increase of annual inflation towards the end of the year but it sees the acceleration as caused largely by temporary factors which would not require changes in policy.

Supporting the ECB’s stance, underlying price pressures remained muted, with a core indicator excluding volatile food and fuel prices at 0.9 per cent on an annual basis, the same as in June, Eurostat data showed, confirming the previous reading published in late July.

An even narrower measure, which excludes also alcohol and tobacco prices, eased to 0.7 per cent from 0.9 per cent in June, also in line with the initial estimate.

The higher rate in July was largely due to a spike in energy prices, which Eurostat said on Wednesday rose 14.3 per cent on an annual basis, the highest increase this year. The reading revised upward Eurostat’s earlier estimate of a 14.1 per cent hike.

Energy prices contributed 1.3 percentage points to the total 2.2 per cent rate in July, Eurostat said.

Food, alcohol and tobacco prices rose annually by 1.6 per cent in July, Eurostat confirmed on Wednesday, whereas prices in the services sector, the largest in the euro zone economy, increased 0.9 per cent.

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