Euro area: January inflation review Final estimate

According to Eurostat's final release , the e uro area annual headline inflation averaged 1. 66 % in January ( 1.6 9 % flash estimate ) , down from 1 . 97 % in December . Core inflation, which excludes energy and food, alcohol and tobacco prices, held at 2. 18 % ( 2.19% flash estimate ) , down from 2. 32 % in the previous month. HICP inflation by components showed: A lower contribution of Services to annual headline inflation at 1. 48 pp (1. 5 7 pp in December ). An increased contribution of Food, Alcohol and Tobacco up to 0. 50 pp (0. 4 8 pp in December ). A larger negative contribution of the Energy inflation at -0. 41 pp (-0. 17 pp in December ). A broadly unchanged contribution of Non-Energy Industrial Goods (NEIG) to 0. 1 0 pp (0. 09 pp in December ). We expect headline inflation to average 1.9% yoy and core inflation 2.1% yoy over 2026. We thus maintain our view of unchanged ECB policy rates in 2026, with a dovish bias.