FX.co ★ German Inflation Rises in January as Food Prices Jump

Germany's inflation rate for January 2026 has climbed to an annual rate of 2.1%, up from December's 15-month low of 1.8%, and slightly exceeding the market's forecast of 2.0%, as per preliminary estimates. The harmonized index of consumer prices (HICP), a key measure scrutinized by the European Central Bank (ECB), also rose to 2.1%, aligning both figures near the ECB’s target of 2%. The inflation rate for goods increased to 1.0% from 0.4%, mainly driven by a notable surge in food prices to 2.1% from 0.8%. This rise occurred despite a sharper decrease in energy costs, which fell by 1.7% compared to a previous decline of 1.3%. On the other hand, inflation for services moderated to 3.2% from 3.5%, which provided some respite from underlying price pressures. Core inflation, excluding volatile food and energy prices, edged up to 2.5% from 2.4%, after hitting its lowest point in more than four years in December.