When I look at the July 2025 inflation figure, 2.9% year-on-year, down from 3.1% in June, I don’t just see a number. I see a pulse. A soft beat in the economic bloodstream telling us the patient, our market, is neither feverish as in 2022’s 14% spikes, nor resting in perfect health.

Inflation is not a static fact; it’s a story in motion. The Consumer Price Index (CPI) is the storyteller, and every month it whispers how much our lives cost compared to the year before. For July, goods and services cost 1.3% more than in June, but before you panic about short-term jumps, remember: summer is not just sunshine, it’s airline tickets, holiday rentals, and seasonal spikes. Some of that heat fades with the season.

The Long Arc: Why the History Matters

If we zoom out, the last five years read like a drama in three acts:

1. The Calm Before (2020–2021)
   Inflation mostly between 1% and 3%. Predictable. Controllable. We could budget without fear that bread or electricity would double in cost overnight.
2. The Fire Years (2022)
   A surge that hit 14.5% in September. Energy shocks, supply chain ruptures, geopolitical tremors. This was not just “more expensive milk”; it was a deep restructuring of price expectations across the economy.
3. The Cooling (2023–2025)
   From the peak, a steady descent. 2023 flirted with deflation in October (-0.4%), then returned to moderate growth. Now, in mid-2025, we’re hovering under 4%, like a ship slowing after a storm, still moving, but steadier.

The Drivers: What’s Pushing and Pulling Prices

CBS data shows that housing, water, and energy remain the heavyweight contributors to July’s inflation (+1.13 percentage points of the total 2.9%). Yet even here, the pressure eased: rent growth slowed from 5.4% in June to 4.9% in July.

The smaller but still telling pushes came from:

• Food and non-alcoholic beverages: +0.55 pp
• Various goods and services: +0.47 pp
• Recreation and culture: +0.27 pp

Meanwhile, some sectors pulled inflation down:

• Clothing and footwear: -0.10 pp
• Communication: -0.11 pp

This is the quiet tension inside the CPI: while you pay more for your rent and your groceries, you might pay a little less for your phone plan or your summer jacket. Inflation is not one wave, it’s a tide with multiple currents.

Why Entrepreneurs Should Care

For an entrepreneur, inflation is not an abstract statistic. It’s:

• Pricing power: Can you raise your prices without losing clients?
• Cost of capital: Inflation pressures interest rates, and rates pressure your financing.
• Consumer behavior: As essentials get pricier, discretionary spending changes. Your luxury service might feel the pinch before your competitor selling staple goods does.

A drop from 3.1% to 2.9% might look small, but it signals whether you’re steering into calmer waters or heading back into turbulence.

My Take

This July figure tells me the economy is cooling without freezing. We’re in a delicate phase where the main enemy is not runaway inflation, but complacency. In 2022, businesses learned to adapt under pressure. In 2025, the challenge is different: how to stay agile when the danger feels less urgent, because that’s when we tend to relax, just before the next surprise.

Numbers give us the what. Understanding the why is our real edge.

AUTHOR : Paolo Maria Pavan

Co-Creator of Xtroverso | Head of Global GRC @ ZENTRIQ™

Paolo Maria Pavan builds systems that balance rules with freedom, clarity with transformation. In his third life, he writes and speaks openly about markets, governance, and risk, not as a trader chasing price, but as a reader of patterns, behaviors, and distortions. A serial entrepreneur shaped by failure and reinvention, he sees governance as a living force for trust and progress, and refuses to avoid the hard conversations that make it real.