FX.co ★ Austria’s HICP Inflation Cools Sharply to 2.0% in January, Down from 3.8%

Austria’s Harmonised Index of Consumer Prices (HICP) inflation eased markedly at the start of the year, with the annual rate falling to 2.0% in January 2026 from 3.8% in December 2025. The latest year-over-year reading, updated on 4 February 2026, shows inflation moving much closer to the European Central Bank’s medium-term target, signaling a substantial cooling in price pressures.

The figures are based on a year-over-year comparison, with the January 2026 rate measured against January 2025 and the previous December 2025 rate measured against December 2024. The sharp deceleration from 3.8% to 2.0% suggests that the inflationary surge seen over the past years is continuing to unwind, reducing pressure on household budgets and potentially reshaping expectations for monetary conditions in the euro area.

For policymakers and investors, the move toward 2.0% is a key milestone, as it points to inflation coming under firmer control without additional information yet on underlying drivers such as energy, food, or core components. Market participants will now watch upcoming releases to see whether Austria can sustain HICP inflation around this level in the months ahead.