Overview
- Eurostat’s flash estimate matched forecasts at 2.0% for December, easing from 2.1% in November.
- Core inflation slowed to 2.3% year over year, and services inflation cooled to 3.4%.
- Falling energy prices pulled headline inflation lower, offsetting a pickup in food costs.
- The ECB left its deposit rate unchanged in December after cuts from a 2024 peak of 4%, maintaining a meeting‑by‑meeting stance.
- Markets see scope for further easing in 2026 as inflation could slip below target, though officials signal no rush to change policy and the next decision comes on Feb. 5.