The increase was mainly driven by renewed energy price pressure. Energy prices are expected to rise 10.0 percent year-on-year in July, up from 8.5 percent in June, according to Eurostat, the statistical office of the European Union (EU). Services inflation is also expected to rise to 3.3 percent from 3.2 percent a month earlier.

BRUSSELS, July 31 (Xinhua) -- Annual inflation in the eurozone is expected to edge up to 2.9 percent in July from 2.8 percent in June, according to a flash estimate released by Eurostat on Friday.

The increase was mainly driven by renewed energy price pressure. Energy prices are expected to rise 10.0 percent year-on-year in July, up from 8.5 percent in June, according to Eurostat, the statistical office of the European Union (EU). Services inflation is also expected to rise to 3.3 percent from 3.2 percent a month earlier.

Food, alcohol and tobacco prices are estimated to rise 1.2 percent year-on-year, down from 1.5 percent in June, while non-energy industrial goods are expected to post an annual inflation rate of 0.9 percent, up from 0.7 percent. Core inflation, which excludes energy, food, alcohol and tobacco, is estimated at 2.5 percent in July, up from 2.4 percent in June.

According to Eurostat data, inflation rose in three of the eurozone's largest economies in July. Germany's rate increased to 2.8 percent from 2.4 percent in June, France's to 2.4 percent from 2.0 percent, and Spain's to 3.8 percent from 3.6 percent. Italy's rate, meanwhile, edged down to 2.9 percent from 3.0 percent.

Among eurozone members with available data, Lithuania is estimated to have posted the highest annual inflation rate in July at 5.6 percent, while Estonia is estimated to have posted the lowest at 2.0 percent.

Bert Colijn, ING's chief economist for the Netherlands, said on Friday that fuel prices rose sharply in July, but their impact on the month's inflation figure was relatively modest because the month began while the U.S.-Iran memorandum of understanding was still in place.

He warned that inflation could rise significantly in August if oil prices remain around their current levels, adding that the uptick in core inflation reflected both goods and services inflation trending slightly higher.

The data came after the European Central Bank (ECB) decided last week to keep its three key interest rates unchanged. The ECB said that the outlook for energy prices remained highly volatile and the full inflationary impact of the energy shock had yet to play out.