Higher energy costs push euro area inflation to 2.9 per cent

Annual consumer inflation in Cyprus stood at an estimated 4 per cent in July 2026, according to preliminary data released by Eurostat on Friday.

This headline figure reflects a slight cooling from the 4.1 per cent rate recorded in June 2026, although price pressures remain significantly elevated compared to earlier periods.

On a monthly basis, consumer prices in Cyprus rose by 0.3 per cent month-on-month between June 2026 and July 2026.

The latest estimate highlights a dramatic shift when viewed against the 0.1 per cent year-on-year rate registered in July 2025.

Prior to the current level, national price growth had accelerated sharply to 3.5 per cent year-on-year in May 2026 before climbing further the following month.

All measurements for both Cyprus and the wider bloc are calculated using the Harmonised Index of Consumer Prices (HICP).

While local inflation experienced a modest deceleration, euro area annual inflation moved in the opposite direction, creeping up to 2.9 per cent in July 2026.

The flash estimate from the EU statistical authority indicates that the single-currency zone saw a tick upwards from the 2.8 per cent rate logged in June 2026.

A major driver behind the broader European uptick was energy prices, which are expected to post the highest annual rate among the main components at 10.0 per cent in July 2026, up from 8.5 per cent in June 2026.

Services inflation across the monetary block also edged higher, reaching 3.3 per cent in July 2026 compared with 3.2 per cent in June 2026.

Similarly, the rate for non-energy industrial goods picked up to 0.9 per cent in July 2026, rising from 0.7 per cent in June 2026.

In contrast, the category covering food, alcohol and tobacco provided some relief across the eurozone, slowing to 1.2 per cent in July 2026 down from 1.5 per cent in June 2026.