Euro Area: January inflation hits lowest rate in post-pandemic era
Latest reading: Harmonized consumer prices were up 1.7% in annual terms in January, following a 2.0% rise in the prior month. January’s reading was the weakest since April 2021 and in line with market expectations.
Relative to the prior month’s data, there were reduced price pressures for energy prices (-4.1% on a year-on-year basis vs -1.9% in December) and services (+3.2% vs +3.4% in December). In contrast, there were stronger price pressures for non-energy industrial goods (+0.4% vs +0.3% in December) and for food, alcohol and tobacco (+2.7% vs +2.6% in December).
Meanwhile, core consumer prices increased 2.4% on a year-on-year basis in January, unchanged from the prior month.
Lastly, harmonized consumer prices declined 0.55% in January in month-on-month terms, following a 0.18% increase in the previous month.
Beginning with this release, Eurostat revised its inflation methodology to better capture shifts in consumer spending patterns and to align with UN recommendations. The statistical office also rebased the index to 2025. Eurostat has said the changes could affect reported inflation rates in some countries, though it does not expect a significant distortion in the overall data.