Eurozone inflation holds steady above ECB target

Inflation in the euro area has remained unchanged for three months now, official data from Brussels show. But hikes in consumer prices have been higher than the ECB's target of 2.0 percent for almost two years now. Inflation in the 17-member eurozone held steady at 2.4 percent for the third consecutive month in July, the European Union's statistics agency, Eurostat, reported on Thursday, thus widely confirming analysts' expectations. The figures released by the agency mean that consumer prices have now been above the European Central Bank's (ECB) 2.0-percent annual target for a total of 20 months in a row. The main drivers behind July's average inflation rate were spiking prices for alcohol and tobacco which saw a 4.7-percent increase year-on-year, as well as housing with a 3.8-percent rise and transportation with 3.2 percent. By contrast, prices for communications dropped by 3.1 percent in July. Heterogeneous picture National inflation rates varied wildly. While debt-stricken Greece logged a mere 0.9-percent increase, Germany posted the second-lowest inflation rate at 1.9 percent and Estonia the highest in the euro area at 4.2 percent. In the wider 27-member European Union, inflation also remained unchanged at 2.5 percent. ECB President Mario Draghi said he expected average eurozone inflation to drop below the 2.0-percent threshold only in the course of next year. The central bank this month left its benchmark refinancing rate on hold at a historic low of just 0.75 percent, but Draghi hinted the ECB might soon decide on yet another cut in borrowing costs.