Europe to raise interest rates amid strong inflation and economic mood

EUROZONE annual inflation held well above the European Central Bank’s target in July while economic sentiment surprised on the upside, cementing expectations the bank will raise interest rates on Thursday.

Inflation in the 12 countries using the euro was 2.5% year-on-year, the European Union’s statistics office estimated on Monday, unchanged from June above the 2% expectations.

Economic sentiment in the euro zone rose to 107.7 points in July from a revised 107.1 in June, the European Commission said, the strongest reading since early 2001.