Annual inflation in the eurozone rose unexpectedly in January, reaching 2.5%, up from 2.4% in December 2024, according to preliminary data from Eurostat. This increase surpassed market expectations, which had anticipated inflation to remain at its December level. It also marks the highest inflation rate since July 2024, moving further away from the European Central Bank’s target of 2%.

On a monthly basis, consumer prices declined by 0.3% in January, following a 0.4% rise in December. The surge in inflation was largely driven by higher energy prices, which increased by 1.8% year-on-year after showing only a marginal 0.1% rise in the previous month. Meanwhile, inflation in non-energy industrial goods climbed for the second consecutive month, rising by 0.5%.

In contrast, inflation in the services sector slightly slowed to 3.9% from 4.0% in December, while the rate for food, alcohol, and tobacco declined to 2.3% from 2.6%. Core inflation, which excludes food and energy prices, remained stable at 2.7% year-on-year for the fifth consecutive month—the slowest pace of increase since February 2022.

Among eurozone countries, Ireland recorded the lowest inflation rate in January at 1.5%, followed by Finland at 1.6% and Italy at 1.7%. The highest inflation rates were reported in Croatia (5.0%), Belgium (4.4%), Slovakia (4.1%), and Austria (3.5%).