Global Economy
Eurozone Inflation Slows to 1.7% in January, ECB Likely to Hold Rates
Eurostat’s final data for January 2026 show that consumer‑price inflation across the 21 euro‑area countries fell to 1.7 % year‑over‑year – the lowest level since September 2024. On a monthly basis, prices dropped 0.6 %, sharply revising the earlier estimate of a modest rise. Core inflation, which excludes food and energy, slipped to 2.1 %. The numbers bolster expectations that the European Central Bank will keep interest rates unchanged for the rest of the year, having already left policy rates on hold at its February meeting.
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Latest Inflation Data
According to Eurostat’s final figures released on 25 February 2026, consumer price growth across the 21 euro‑area members slowed to an annual 1.7 % in January. This is the lowest rate recorded since September 2024, down from 2.0 % in December 2025.
Monthly and Core Inflation
On a month‑over‑month basis, prices fell by 0.6 %, a sharper decline than the preliminary estimate of a 0.2 % rise. Analysts surveyed by Reuters had expected a 0.5 % drop.
The underlying (core) inflation rate, which strips out volatile food and energy components, edged down to 2.1 % in January, marginally below the earlier flash estimate of 2.2 %.
Implications for ECB Policy
These figures reinforce expectations that the European Central Bank will keep its key interest rates unchanged for the remainder of 2026. The Governing Council in Frankfurt already left rates steady at its February meeting, signalling confidence that inflation will converge on the 2 % target without aggressive tightening.
- Eurozone headline inflation: 1.7 % YoY
- Month‑on‑month change: ‑0.6 %
- Core inflation: 2.1 %
- ECB policy outlook: rates expected to stay on hold