ING’s Bert Colijn notes Eurozone inflation fell to 1.7% in January on energy base effects and is expected to stay just under 2% through 2026, with core at 2.2% and close to target. He says this leaves the European Central Bank in a good position, with little change expected in February data and unemployment still hovering near record lows.
Stable prices and tight labour conditions
“Inflation dropped to 1.7% in January, which was in line with expectations due to energy price base effects.”
“Essentially, this was not much of a surprise as inflation is widely expected to remain just under 2% for most of 2026.”
“Core inflation at 2.2% is now also more in line with the target as well, leaving the European Central Bank in a ‘good place’ for now.”
“Don’t expect much change in February, although higher energy prices could push up headline inflation.”
“So far, the eurozone unemployment rate continues to hover around all-time lows despite vacancy rates normalising somewhat.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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