German inflation remained steady in July, preliminary data show, as the eurozone considers its next steps following last week’s decision to keep interest rates unchanged after a series of cuts, AFP reported.

Annual inflation in Europe’s largest economy stood at 2.0%, according to preliminary data from the federal statistical office Destatis. This exceeded the expectations of analysts surveyed by financial firm FactSet, who had forecasted 1.8%.

Compared to the previous month, prices rose by 0.3%, Destatis noted. Inflation for goods saw a slight increase, while inflation for services slowed down.

These figures reassure members of the European Central Bank (ECB) that overall inflation in the eurozone is moving in the right direction.

Germany is the largest economy in the eurozone, accounting for about one quarter of its gross domestic product.

At its latest meeting in July, the ECB kept the key deposit rate at 2%, ending a series of cuts that began in September 2024.

The central bank is expected to keep rates unchanged at its next meeting, as eurozone inflation hovers around the 2% target level.

However, some analysts do not rule out the possibility of a rate cut in September if tariffs imposed by U.S. President Donald Trump lead to an economic slowdown in Europe and increased exports of cheap goods to the continent instead of to the U.S. | BGNES