Euro Area

• Eurostat reports that annual inflation in the euro area is expected to rise to 2.9% in July 2026, increasing from 2.8% in June. • Energy prices are the primary driver of this increase, with an expected annual rate of 10.0% in July compared to 8.5% the previous month. • Other contributing factors include services rising to 3.3% and non-energy industrial goods increasing to 0.9%, while food, alcohol, and tobacco saw a slight dip to 1.2%.

• Eurostat released a preliminary flash estimate showing that seasonally adjusted GDP grew by 0.4% in the euro area and 0.5% in the EU during the second quarter of 2026. • The growth figures are measured as an increase compared to the previous quarter, reflecting the economic performance of the EU 27 member states. • These indicators are critical for monitoring the overall economic health and recovery trajectory of the European Union and the shared currency zone.

• The European Commission has launched a call for tenders to establish up to seven AI Gigafactories across Europe to accelerate the region's technological sovereignty. • The initiative involves significant investments of up to €30 billion, aimed at transforming the European Union into the "Continent of Artificial Intelligence." • This strategic move matters as it seeks to consolidate Europe's position as a global technological leader and reduce dependence on external AI infrastructure.

• The European Central Bank (ECB) reported on economic and financial developments across institutional sectors for the first quarter of 2026. • A notable increase in net lending was observed, driven largely by the conversion of pension schemes from defined benefits to defined contributions in the Netherlands. • This shift resulted in significant net capital transfers from financial corporations to households, impacting the net lending figures for both sectors.

• The European Central Bank (ECB) reported monetary developments for the euro area as of June 2026. • Data shows a divergence in deposit growth, with household deposits slowing to a 2.6% annual growth rate from 2.8% in May. • Conversely, deposits from non-financial corporations saw an increase in their annual growth rate, rising to 5.3% in June from 4.2% in May.

• European Central Bank President Christine Lagarde has unveiled 10 design options for a new generation of euro banknotes. • The proposed designs are divided into two thematic categories: “European culture” and “rivers and birds.” • Euro-area citizens are invited to vote on their preferred designs through September 21, with the Governing Council expected to make a final decision by the end of the year.

• In the first quarter of 2026, the seasonally adjusted general government deficit to GDP ratio for the euro area (EA21) and the European Union was 3.1%. • This figure represents a slight decrease from the 3.2% deficit recorded in the fourth quarter of 2025. • These indicators provide a critical measure of fiscal health and stability across the member states of the EU and the euro area.