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FRANKFURT, Germany, July 31, 2025 (BSS/AFP) - German inflation remained unchanged in July, preliminary data showed Thursday, as eurozone rate-setters mull their next steps after keeping interest rates on hold last week following a string of cuts.

Annual inflation in Europe's top economy came in at 2.0 percent, according to preliminary data from federal statistics agency Destatis.

That was higher than the 1.8 percent expected by analysts polled by financial data firm FactSet.

Compared to the previous month, prices rose 0.3 percent, federal statistics office Destatis said. 

Goods inflation notched up a small rise while services inflation slowed a little, Destatis said.

The inflation figure will reassure rate-setters at the European Central Bank that overall euro area inflation is on the right track.

Germany is the eurozone's largest economy by some distance, accounting for about a quarter of its GDP.

The ECB kept its key deposit rate unchanged at two percent at its last meeting in July, ending a streak of cuts stretching back to September 2024.

The central bank is widely expected to keep rates unchanged at its next meeting whilst eurozone inflation is around the ECB's two-percent target.

Some analysts nevertheless see room for a possible September cut if tariffs imposed by US President Donald Trump end up cooling Europe's economy and causing cheap exports to be sent to the continent instead of the United States.