ING’s Bert Colijn notes that euro zone inflation fell to 1.7% in January as a result of the energy base effect and is expected to remain just below 2% until 2026, with core inflation at 2.2% and close to target. In his opinion, this puts the European Central Bank in a good position, with minor changes expected in February’s data and unemployment still hovering near record lows.

Stable prices and challenging working conditions

“Inflation fell to 1.7% in January, which was in line with expectations due to the base effect of energy prices.”

“This wasn’t actually a big surprise, as inflation is widely expected to remain just below 2% for most of 2026.”

“Core inflation of 2.2% is now also more in line with target, which puts the European Central Bank in a ‘good position’ for now.”

“No major changes are expected in February, although higher energy prices may push headline inflation higher.”

“So far, the unemployment rate in the euro area continues to hover around historic lows, despite some normalization in the vacancy rate.”

(This article was created with the support of an artificial intelligence tool and has been reviewed by an editor.)