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Eurozone inflation unexpectedly falls to 2.5 percent in July
BRUSSELS (AP) ' Official figures show inflation in the 17 countries that use the euro unexpectedly fell in July, raising speculation that the European Central Bank may not need to raise interest rates as quickly as markets have been predicting.
Eurostat, the EU's statistics office, says Friday that consumer prices in the eurozone rose by 2.5 percent in the year to July. That's still above the ECB's target of keeping inflation just below 2 percent, but down on market expectations for an unchanged reading of 2.7 percent.
Despite the debt crisis that has engulfed the eurozone, the markets have been pricing in another interest rate increase from the ECB in September.
The bank has raised its main interest rate a quarter of a percentage point on two occasions this year to 1.5 percent.