SEOUL, Aug 2 Reuters South Korea39;s consumer inflation cooled more than expected in July to its slowest in 25 months, official data showed on Wednesday, supporting market views that the monetary tightening cycle was over contrary to the central bank39;s hawkish rhetoric.

The consumer price index stood 2.3 higher in July than a year earlier, after a 2.7 rise in June and compared with a median 2.4 increase forecast in a Reuters survey of economists.

It marked the weakest annual increase since June 2021, according to Statistics Korea, and compared with a near 24year high of 6.3 in July 2022 and the central bank39;s mediumterm target of 2.

It was also the second consecutive month the consumer price data came in lower than market expectations.

The finance ministry said after the data release inflation would continue to stabilise this year, after temporary upward pressure in August and September from seasonal factors, but the central bank said it would rebound from August to around 3 by the end of the year.

Considering domestic conditions, anyone in the financial market cannot help but expect a rate cut by the central bank, said economist Kong Dongrak at Daishin Securities.

But, there are other factors that need to be taken into consideration, Kong added, citing monetary policy in the United States.

On a monthly basis, consumer prices rose 0.1, picking up from no change the previous month, but weaker than a 0.2 rise expected by economists.

Broken down by sector,…