Inflation in the Euro zone surpassed expectations in July, reaching a high of 2.6%.

• The European Union's statistics agency announced on Wednesday that headline inflation in the euro zone unexpectedly increased to 2.6% in July.
• In July, the core inflation rate, which does not include energy, food, alcohol, and tobacco prices, reached 2.9%, exceeding expectations.
• The inflation rate for July was 4%, a slight decrease from the 4.1% recorded in June.

Despite a slight easing of price growth in the services sector, headline inflation in the euro zone unexpectedly increased to 2.6% in July, according to the European Union's statistics agency.

In July, inflation was expected to remain unchanged at 2.5%, according to economists polled by Reuters.

In July, core inflation, excluding energy, food, alcohol, and tobacco prices, reached 2.9%, higher than the Reuters estimate of 2.8%. This figure was also higher than the core print of 2.9% in June.

The inflation rate for July was 4%, lower than the 4.1% recorded in June.

Inflation in several key euro zone countries, including Germany and France, increased slightly in July, with both countries seeing a rise from 2.5% in June to 2.6% in July.

The release of the zone's second quarter gross domestic product, which grew 0.3% in the three months to the end of June, was followed by the announcement of inflation rates the next day.

Despite the 0.1% contraction in Germany, the euro zone's GDP growth exceeded the 0.2% forecast by economists polled by Reuters.

The ECB's potential future interest rate cuts will be evaluated by investors in light of the new data. The bank kept rates unchanged during its recent meeting, following a reduction in June. It also left open the possibility of another cut in September.

The ECB Governing Council stated that it would take into account the inflation dynamics and outlook, as well as the effectiveness of monetary policy transmission, when making its decisions. It emphasized that it was not committing to a specific rate trajectory.

This is a breaking news story and will be updated.