Eurozone inflation jumps to 2.5% in March on surging oil, gas costs

01/04/2026 04:23 AST

Euro zone inflation soared past the European Central Bank's 2% target this month as surging oil and gas costs drove up headline prices, but ?the jump was smaller than expected and core inflation declined, muddying the picture for policymakers.

Overall inflation in the 21 countries sharing the euro currency jumped to 2.5% ?in March from 1.9% a month earlier, below expectations for 2.6% in a Reuters poll of economists, as energy costs rose 4.9%.

Oil prices have nearly doubled as a result of the Iran war and the ECB is now debating whether to raise interest rates to prevent this surge from becoming entrenched in the price of other goods and services.

"The previously price-stable environment is saying goodbye" said Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe. "What matters is that ?this inflationary dirt does not feed through into the core rate."

Core inflation declined to 2.3% from 2.4%, undershooting the consensus expectation of 2.4%. Services inflation also eased slightly, from 3.4% to 3.2%. Non-energy industrial goods fell to 0.5% from 0.7%, according to a flash estimate published by Eurostat on Tuesday.

After contracting by 3.1% in February, energy inflation surged to 4.9% year-on-year - a turnaround of nearly 8% points in a single month.


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