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Eurozone inflation eased to 1.7% in January 2026, dropping below the European Central Bank’s (ECB) 2% target for the first time in several months, according to preliminary figures released by Eurostat on Wednesday.
The drop from December’s 2.0% was mostly due to a sharper decline in energy prices, which fell 4.1% in January after a 1.9% fall the month before.
Core inflation, which excludes energy, food, alcohol, and tobacco and is closely watched as a gauge of underlying price trends, edged down to 2.2% in January from 2.3% in December. However, prices for food, alcohol, and tobacco rose at a faster pace, with annual inflation in this category reaching 2.7% in January, up from 2.5% a month earlier.
The data revealed notable differences in monthly inflation rates across euro area countries. Slovakia posted the highest increase, with a 1.9% monthly rise in consumer prices. Lithuania followed at 1.2%, and Croatia at 1.0%.
In contrast, several countries saw prices decline. Belgium recorded the sharpest drop, with a 1.5% fall from the previous month. The Netherlands and Luxembourg each registered monthly decreases of 1.3%.
The European Central Bank is expected to leave its key interest rates unchanged at its upcoming policy meeting on Thursday.
The most recent adjustment came in June 2025, when the bank cut its deposit rate to 2.00% from 2.25% in April, continuing a gradual easing cycle that began earlier in the year.
The latest inflation figures align with expectations and reinforce the ECB’s cautious approach as it balances the risk of acting too soon with its mandate to ensure price stability.
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