Eurozone Inflation Rises Slightly to ECB Target in June

Euro area annual inflation climbed to 2.5% in March 2026, up from 1.9% in February and slightly below market expectations of 2.6%, according to a preliminary estimate. This marked the highest rate since January 2025, pushing inflation above the ECB’s 2% target as energy costs soared 4.9%, the first annual increase in nearly a year and the sharpest since February 2023, driven by the Middle East conflict. Meanwhile, price pressures eased in other sectors: services inflation slowed to 3.2% (from 3.4%), non-energy industrial goods fell to 0.5% (from 0.7%), and food, alcohol, and tobacco dipped to 2.4% (from 2.5%). The core rate, excluding volatile energy, also cooled to 2.3% from 2.4%. Among the Eurozone’s largest economies, inflation accelerated sharply in Germany (2.8% vs. 2.0%), France (1.9% vs. 1.1%), Spain (3.3% vs. 2.5%), and the Netherlands (2.6% vs. 2.3%), while Italy's rate remained stable at 1.5%.

The Eurozone’s annual inflation rate was confirmed at 1.9% in February 2026, up from January’s 16-month low of 1.7%, driven by a notable acceleration in services inflation, which climbed to 3.4% from 3.2%, and a pickup in non-energy industrial goods inflation, rising to 0.7% from 0.4%. Meanwhile, food, alcohol, and tobacco inflation edged down slightly to 2.5% from 2.6%, while energy prices continued to decline, though at a slower pace, falling 3.1% compared to January’s 4.0% drop. Core inflation, which excludes volatile energy, food, alcohol, and tobacco prices, increased to 2.4%, rebounding from January’s more than four-year low of 2.2%. Among the bloc’s largest economies, the Harmonised Index of Consumer Prices accelerated in France (1.1% vs. 0.4%), Spain (2.5% vs. 2.4%) and Italy (1.5% vs. 1.0%), while easing slightly in Germany (2.0% vs. 2.1%).

Annual inflation in the Euro Area rose to 1.9% in February 2026, up from January’s 16-month low of 1.7% and above market expectations of 1.7%, according to a preliminary estimate. Price pressures strengthened notably in services, where inflation accelerated to 3.4% from 3.2%, while non-energy industrial goods inflation picked up to 0.7% from 0.4%. Energy prices continued to decline, but at a slower pace, falling 3.2% compared with a 4.0% drop in January. Food, alcohol and tobacco inflation held steady at 2.6%. Core inflation, which excludes energy, food, alcohol and tobacco, rose to 2.4%, rebounding from January’s more than four-year low of 2.2%. Among the bloc’s largest economies, the Harmonised Index of Consumer Prices (HICP) accelerated in France (1.1% vs. 0.4%), Spain (2.5% vs. 2.4%) and Italy (1.6% vs. 1.0%), while easing slightly in Germany (2.0% vs. 2.1%).