Eurozone Inflation Rises to 1.9% in February, Above Expectations
Eurozone inflation increased more than expected in February, according to new data released on Tuesday. The rise in consumer prices is likely to draw close attention from the European Central Bank, particularly as energy costs continue to climb.
The annual consumer price index (CPI) rose 1.9% in February, up from 1.7% in January and above market forecasts. On a monthly basis, euro area inflation increased 0.7%, reversing the 0.6% decline recorded in the previous month.
Core Inflation Also Moves Higher
Core inflation, which excludes more volatile components such as food and fuel, accelerated to 2.4% year-over-year in February. This compares with 2.2% in January and signals persistent underlying price pressures across the euro area economy.
The stronger inflation reading comes after the European Central Bank kept interest rates unchanged at its first policy meeting of 2026. Policymakers reiterated their expectation that inflation will stabilize around the ECB’s 2% medium-term target.
ECB Urges Caution on Policy Outlook
Speaking at the post-meeting press conference, ECB President Christine Lagarde stated that both the central bank and the eurozone inflation outlook remain in a “good place.” However, she cautioned that inflation data could fluctuate in the coming months and emphasized that policy decisions should not be based on a single data release.
Separately, ECB policymaker Yannis Stournaras said the central bank should keep its options open regarding future interest rate decisions. He noted that the inflationary impact of the ongoing Iran conflict will depend on its duration and intensity.
Geopolitical Risks Add to Inflation Concerns
The widening U.S.-Israeli conflict with Iran is raising concerns about higher energy prices and supply disruptions. A prolonged escalation could increase inflationary pressures in Europe while also weighing on the region’s already modest economic growth.
Higher energy costs and potential disruptions in chemical supply chains are seen as key risks that could complicate the ECB’s inflation outlook in the months ahead.
