Inflation in the euro area fell to 1.9% in December, according to new figures, down from 2.1% and below the expected 2%.
It marked the first time since May that inflation has come in below the European Central Bank’s (ECB) 2% target, reinforcing expectations that interest rates will remain on hold.
EU core inflation, meanwhile, fell to 2.3%, a slight decrease from the 2.4% registered in November, according to new official figures from Eurostat.
Eurostat said that the lowest annual rates were registered in Cyprus (0.1%), France (0.7%) and Italy (1.2%). The highest annual rates were recorded in Romania (8.6%), Slovakia (4.1%) and Estonia (4%).
Compared with November 2025, annual inflation fell in eighteen member states, remained stable in three and rose in six.
Services inflation remained sticky in December as the highest contributor to euro area inflation, up 1.54 percentage points. Prices for food, alcohol & tobacco (+0.49 percentage points) and non-energy industrial goods (+0.09 pp) were the next highest increases.
Last month, the European Central Bank (ECB) held interest rates steady at 2.15%, capping off the year as anticipated with unchanged guidance for bank borrowing costs. The bank last cut rates at its May meeting.
