The unchanged growth in prices weakens the case for a rate hike by the Bank of England, even through inflation remains above Threadneedle Street's 2% target.
Inflation data on Tuesday and wage numbers a day later should be the centrepiece of the week.
A relatively new phenomenon, inflation has become a real worry for governments since the 1960s.
"While higher inflation figures may keep lingering hopes alive, the slowing trend in consumer activity, as well as uncertainty over the degree of slack in the labour market, should keep the hawks at bay".
The retail price index, used by rail carriers to set fares this month, nevertheless rose 3.6 percent on the year, up from 3.5 percent in June.
The first Q2 growth estimates for the currency bloc came in at 0.6% quarter-on-quarter and 2.1% year-on-year. There will need to be a series of stronger than expected United Kingdom data releases to trigger a more substantial shift in sentiment with GBP/USD unlikely to make significant headway in the near term, especially with a firmer US dollar tone.
The pound is looking "extremely undervalued" against the euro, economists at UBS Wealth Management said.
Cameraman drilled below belt during Red Sox first pitch
The Red Sox honored the members of the 1967 Impossible Dream season with a ceremony before last night's game against St. Bogaerts knocked in a run with the bases loaded during the eight-run fifth inning, ending his streak without an RBI.
"Any rebound of such magnitude will be seen as a relief and could carry USDJPY through the 111.00 level, but if the data misses the mark again - or worse prints negative the pair could once again tumble towards 109.00 as the day proceeds", said Boris Schlossberg, managing director of FX strategy, at BK Asset Management, in a note.
Inflationary pressures were visible across a number of import-intensive goods including food, clothing and furniture last month, according to the data from the Office for National Statistics.
If inflation rises to 2.7 percent, as expected, it will underline the pain being felt by households whose incomes are not rising as fast.
Sterling jumped almost half a cent against the USA dollar and British government bond prices slid after the jobless rate edged down to 4.4 percent in the three months to June, against expectations for it to hold at 4.5 percent in a Reuters poll of economists.
Official data to be released at 0830 GMT today are expected to show that earnings continue to increase at less than the rate of inflation in the United Kingdom, potentially reducing consumer spending and the overall growth of the economy in the third quarter.
Britain's annual inflation rate steadied in July, with an expected rise failing to materialise as the pound recovers from a Brexit-fuelled slump, official data showed Tuesday.