Euro Area Inflation Confirmed at 16-Month Low

2026-02-25 10:08 By Joana Ferreira 1 min. read

Annual inflation in the Euro Area was confirmed at 1.7% in January 2026, down from 2.0% in December and marking its lowest level since September 2024.

The moderation coincided with a strong appreciation of the euro, which climbed above $1.20 at the end of the month, its highest level in more than four years.

Price growth slowed for both services (3.2% vs 3.4% in December) and processed food, alcohol & tobacco (2.0% vs 2.1%), while energy prices fell further, dropping 4.0% compared with a 1.9% decline in December.

By contrast, inflation picked up for unprocessed food (4.2% vs. 3.5%) and non-energy industrial goods (0.4% vs. 0.3%).

Core inflation, which excludes energy, food, alcohol, and tobacco, fell to 2.2%, its lowest level since October 2021.

Among the largest eurozone economies, harmonized inflation slowed in France (0.4% vs. 0.7%), Spain (2.4% vs. 3.0%), and Italy (1.0% vs. 1.2%), while it edged higher in Germany (2.1% vs. 2.0%).



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