2026.03.3109:12:25UTC+00Eurozone Inflation Surges in March on Middle East Energy Shock

Annual inflation in the euro area rose to 2.5% in March 2026, up from 1.9% in February and just below market expectations of 2.6%, according to a preliminary estimate. This was the highest reading since January 2025 and pushed inflation back above the ECB’s 2% target, largely due to a 4.9% surge in energy prices—the first year-on-year increase in nearly a year and the steepest since February 2023, driven by renewed tensions in the Middle East.

By contrast, price pressures eased across other major components. Services inflation slowed to 3.2% from 3.4%, inflation for non-energy industrial goods decelerated to 0.5% from 0.7%, and the rate for food, alcohol, and tobacco edged down to 2.4% from 2.5%. Core inflation, which excludes volatile energy prices, also moderated slightly, easing to 2.3% from 2.4%.

Among the largest euro area economies, headline inflation accelerated markedly in Germany (2.8% vs. 2.0%), France (1.9% vs. 1.1%), Spain (3.3% vs. 2.5%), and the Netherlands (2.6% vs. 2.3%), while Italy’s rate remained unchanged at 1.5%.