Euro Area Annual Inflation Drops to 1.7%
The euro area annual inflation rate was 1.7% in January 2026, down from 2.0% in December. A year earlier, the rate was 2.5%. European Union annual inflation was 2.0% in January 2026, down from 2.3% in December.
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. A year earlier, the rate was 2.8%, according to figures published by Eurostat, the statistical office of the European Union.
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.
The lowest annual rates were registered in France (0.4%), Denmark (0.6%), Finland and Italy (both 1.0%). The highest annual rates were recorded in Romania (8.5%), Slovakia (4.3%) and Estonia (3.8%).
Compared with December 2025, annual inflation fell in 23 Member States, remained stable in 1, and rose in 3.
In January 2026, the highest contribution to the annual euro area inflation rate came from services (+1.45 percentage points, pp), followed by food, alcohol & tobacco (+0.51 pp), non-energy industrial goods (+0.09 pp) and energy (-0.39 pp). First Holdco Rises by 12%, Reaches N2.4trn
