FX.co ★ Euro Zone Inflation Slips Below 2% Target in January, Easing to 1.7% YoY

Euro zone consumer price growth slowed further at the start of 2026, with the January year-over-year Consumer Price Index (CPI) reading easing to 1.7%, down from 2.0% in December 2025. The latest figure, updated on 4 February 2026, marks a move below the European Central Bank’s commonly cited 2% inflation benchmark.

Both the current and previous readings are calculated on a year-over-year basis, comparing each month’s price levels to the same month a year earlier. December’s 2.0% figure reflected inflation exactly in line with that benchmark, while January’s 1.7% suggests a further cooling of price pressures across the currency bloc.

The moderation in inflation could influence expectations around future monetary policy in the euro area, as markets assess whether a sustained period below 2% might open the door to a less restrictive stance from policymakers if the trend continues in the coming months.