Inflation in the Eurozone nudged up to 2.6% in July 2024, up from 2.5% in June, defying expectations of a slowdown to 2.4%. The energy sector saw a significant price increase, jumping to 1.3% from 0.2% the previous month. Non-energy industrial goods also saw a slight rise (0.8% vs. 0.7%). Meanwhile, inflation slowed for services (4% vs. 4.1%) and food, alcohol, and tobacco (2.3% vs. 2.4%). Excluding energy, inflation eased slightly to 2.7% from 2.8%. The core inflation rate, excluding food, energy, alcohol, and tobacco, remained steady at 2.9%, against the forecasted 2.8%. The European Central Bank (ECB) now faces a challenging decision on interest rates to balance protecting the banking sector and averting a recession.