Euro area annual inflation rate fell to 1.7 percent in January, down from 2 percent in December, official data showed on Wednesday. The figure stood at 2.5 percent in the same month of the previous year, according to Eurostat. The EU annual inflation also dropped to 2 percent in January from 2.3 percent in December.
France registered the lowest annual rate at 0.4 percent while Denmark followed at 0.6 percent and Finland and Italy both saw 1 percent. Romania recorded the highest annual rate at 8.5 percent followed by Slovakia at 4.3 percent and Estonia at 3.8 percent. Annual inflation fell in 23 Member States, remained stable in one, and rose in three compared with December.
Services provided the highest contribution to the annual euro area inflation rate at plus 1.45 percentage points.
Read more: Eurozone inflation falls to 2.2 percent in March, jobless rate declines
This significant cooling of price pressures marks the lowest level for euro area inflation since September 2024, sliding below the European Central Bank’s 2 percent target.
On the policy front, the ECB Governing Council opted to maintain key interest rates at their February 2026 meeting, with the deposit facility rate remaining at 2.00 percent, as officials continue to monitor the sustainability of inflation reaching the medium-term target amidst global trade uncertainties and geopolitical tensions. Additionally, January 2026 marked a geographical shift for the euro area as Bulgaria officially became the 21st member of the currency bloc.Â
