Oxford Economics analyst Iain Simmons says euro‑area inflation remains above target and faces material upside risks. Middle East tensions have pushed energy prices higher; July headline inflation rose 0.1ppt to 2.9%. Since the breakdown of the Iran ceasefire, the risk of broader inflation spillovers has increased, strengthening the case for an ECB rate rise in September. Simmons adds that yesterday’s stronger‑than‑expected GDP print suggests the euro‑area may better tolerate tightening, but infl

Oxford Economics analyst Iain Simmons says euro‑area inflation remains above target and faces material upside risks. Middle East tensions have pushed energy prices higher; July headline inflation rose 0.1ppt to 2.9%. Since the breakdown of the Iran ceasefire, the risk of broader inflation spillovers has increased, strengthening the case for an ECB rate rise in September. Simmons adds that yesterday’s stronger‑than‑expected GDP print suggests the euro‑area may better tolerate tightening, but inflation’s response to Middle East developments has so far been muted and any second‑round wage effects later this year may be limited.