Euro-zone producer prices held steady in July compared with the previous month, an outturn that was slightly higher than expected but still showed few inflationary pressures in the pipeline.

The European Union's statistics agency Eurostat said the unchanged July figure came after an unrevised June month-on-month fall of 0.1 per cent.

Producer prices declined 0.6 per cent on a yearly basis in July after a dip of 1.1 per cent year-on-year in June.

Economists had, on average, expected producer prices to post a monthly fall of 0.2 per cent and an annual decline of 0.6 per cent. But figures previously released from euro-zone states had foreshadowed that producer prices might hold steady in July rather than fall.

Italy said last week its producer prices jumped unexpectedly in July as a rise in energy and utilities prices powered the monthly index to its biggest rise in 20 months.

The data showed that Italian producer prices rose 0.3 per cent month-on-month, well above analysts' predictions of a 0.1 per cent fall and the highest monthly gain since November 2000.

Hours after the data, the Italian government announced it was freezing utility prices until November 30th in a bid to keep inflation under control. - (Financial Times Service)