Inflation in the eurozone slowed to 2.1% y/y in October

Inflation in the eurozone slowed to 2.1% year-on-year in October 2025, down from 2.2% in September, according to Eurostat’s preliminary estimate. This brings the figure closer to the European Central Bank’s target of 2%.

Core inflation (excluding energy, food, alcohol, and tobacco) was 2.4%.

The largest contribution to price growth came from the services sector, where inflation accelerated to 3.4% from 3.2% a month earlier. This was followed by food, alcohol, and tobacco (+2.5% after 3.0% in September) and non-energy industrial goods (+0.6% after +0.8%). At the same time, energy prices fell by 1.0%, which was the main factor in the slowdown in the overall rate.

Among EU member states, the highest inflation rates in October were recorded in Spain (+3.2%), Austria (+4.0%), Latvia and Lithuania (both +4.2%), and Croatia (+4.0%). The lowest rates were observed in France (+0.9%), Italy (+1.3%), and Finland (+1.5%). In Germany, prices rose by 2.3% y/y.

The slowdown in inflation creates the conditions for further easing of the ECB’s monetary policy, which is gradually lowering interest rates to support the recovery of economic activity in the region. At the same time, over the last three months, the Central Bank has kept the deposit rate at 2%, the main refinancing rate at 2.15% and the marginal lending rate at 2.4%. The main adjustments took place in the first half of the year.

According to preliminary data, in the third quarter of 2025, the GDP of the European Union grew by 0.3% compared to the previous quarter, while in the eurozone it grew by 0.2% quarter-on-quarter. In annual terms, the EU economy grew by 1.5%, and the eurozone economy grew by 1.3%. Sweden, Portugal, and the Czech Republic led the recovery.