Euro area HICP inflation eased to 1.7% YoY in January 2026, down from 2.0% YoY in December 2025, and fell -0.5% MoM, reflecting a broad-based pullback in both goods and services prices.

• The deceleration in the annual rate was in line with analyst estimates and was the lowest since September 2024 (second lowest since April 2021).
• HICP excluding energy eased to 2.3% YoY (Dec: 2.4%) and fell 0.7% MoM, showing cooling underlying inflation beyond volatile energy prices.
• Core inflation excluding energy, food, alcohol and tobacco slowed to 2.2% YoY (Dec: 2.3%) with a 1.1% MoM decline, indicating broad monthly disinflation across core components.
• Food, alcohol and tobacco inflation accelerated to 2.7% YoY (Dec: 2.5%) and rose +0.9% MoM, standing out as one of the few categories showing price increases.
• Unprocessed food inflation jumped to 4.4% YoY (Dec: 3.5%) and surged +1.7% MoM, becoming the strongest upside contributor within the food basket.
• Energy prices deepened their annual contraction to 4.1% YoY (Dec: 1.9%) despite a +0.7% MoM rise, continuing to weigh heavily on headline inflation.
• Non-energy industrial goods inflation remained subdued at 0.4% YoY (Dec: 0.3%) and fell 2.4% MoM, highlighting ongoing goods price softness.
• Services inflation eased to 3.2% YoY (Dec: 3.4%) and declined 0.3% MoM, indicating some moderation in the most persistent inflation component.