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Flash Eurostat data for January 2026 showed euro area annual inflation falling to 1.7%, down from 2.0% in December and beneath the European Central Bank’s 2% target.
Core inflation, excluding food and energy, eased to 2.2% — its weakest since October 2021 — while monthly consumer prices contracted 0.5%, the steepest decline since November 2023.
Services inflation slowed to 3.2%; energy prices plunged 4.1% and non-energy industrial goods rose just 0.4%. National estimates diverged: Germany about 2.1%, Italy 1.0%, France near 0.4% and Slovakia at 4.2%. Markets reacted modestly, the euro steady around $1.18 and bond yields little changed, while swap markets priced only a slim chance of an ECB rate cut later this year.
Policymakers are widely expected to keep the policy rate on hold at the first Governing Council meeting, though analysts flag risks from weak domestic demand, a stronger euro and falling energy costs that could push inflation below target and complicate the ECB’s medium-term outlook.
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Euronews | Latest breaking news available as free video on demandEurozone inflation drops to 1.7%: Will the ECB move interest rates?
The Irish TimesEuro zone inflation falls to 1.7% in January
Reddit r/EconomicsEuro zone inflation cools to 1.7% in January, flash data shows






















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