Inflation in the euro area, Photo: ANP / ddp USA / Profimedia
The annual rate of inflation in the euro area fell in December, in line with the medium-term target of 2% targeted by the European Central Bank (ECB), which is likely to keep interest rates unchanged at its meeting on February 5.
The preliminary data published on Wednesday by the Statistical Office of the European Union (Eurostat) show that the annual inflation rate in the euro area fell in December to 2%, from a level of 2.1% the previous month, Reuters and Agerpres inform. The figure announced by Eurostat is in line with the estimates of analysts interviewed by Reuters. They expect the trend to continue into 2026.
On the other hand, Eurostat data showed that core inflation, which is what remains after prices for volatile goods such as energy and food are removed, eased to 2.3% in December from 2.4% the previous month. Core inflation is the indicator closely watched by the ECB when making its monetary policy decisions.
According to Eurostat, energy prices in the euro area registered a decrease of 1.9% on an annual basis in December. In contrast, prices of services rose by 3.4% and prices of food, alcoholic beverages and cigarettes advanced by 2.6%.
What could lead to a price increase in 2026
The estimate published by Eurostat on Wednesday is a preliminary one, and a revised estimate, which also includes data on inflation in the European Union, will be published on January 19.
Falling energy prices, the appreciation of the euro, increased imports from China and moderation in wage increases could lead to a decline in prices this year, analysts say. But rising defense spending, massive fiscal spending in Germany, solid domestic demand, tightening labor markets and geopolitical turmoil could push prices higher in 2026.
The data confirm the ECB's view that the annual rate of inflation in the euro area is under control, and officials have time to analyze price developments before adopting new monetary policy measures.
