In April, the Eurozone’s core inflation rate— which excludes the more volatile energy and food components as well as shifts in alcohol and tobacco prices—rose by 5.6 percent on an annual basis. This figure comes from Eurostat’s preliminary estimates and marks a tenth of a percentage point drop from the peak rise seen in the prior month. The data suggest a cooling in underlying price pressures, even though the pace remains elevated by historical standards. This nuance matters for households and policymakers alike, as core inflation often serves as a cleaner signal of fundamental price dynamics than headline numbers that can swing on short-term energy or food shocks.
Taken together, April’s readings hint at a first notable slowdown in annual core inflation since mid-2022. After more than two years of persistent strength, the rate has eased enough to show a tentative deceleration, interrupting a steady run that kept upward pressure on wage negotiations, consumer expectations, and policy discourse. Despite this softening, the European Central Bank is expected to continue tightening monetary policy to anchor inflation nearer its target over the medium term, balancing the need to cool demand with the risks to growth and employment. The central bank’s stance reflects a cautious approach aimed at ensuring that the recent momentum does not reverse, thereby safeguarding price stability in the bloc.
Across the euro area, core inflation in April stood out with uneven country-by-country performance. Slovakia reported the highest rate among available data, reaching 11.4 percent, followed closely by Croatia at 9.3 percent. The Netherlands registered 7.9 percent, and Greece reported 7.2 percent. In contrast, several member states posted readings under 5 percent, underscoring a broader divergence in domestic pricing dynamics within the currency union. Luxembourg, Belgium, and a couple of smaller economies exhibited relatively modest pressures, while others showed more pronounced gaps that reflect differences in domestic demand, labor markets, and energy dependencies.
On the headline inflation front, the overall eurozone rate accelerated by a tenth of a percentage point on the month, arriving at 7.0 percent in April after 6.9 percent in March. This uptick signals that, while core inflation may be moderating, energy and other components can still drive consumer price evolution higher in the near term, depending on external shocks, supply chain developments, and monetary policy transmission. The balance between these factors will shape the trajectory of inflation as the year progresses, with policymakers closely watching the interplay between energy prices, wage growth, and consumer spending patterns.
Eurostat’s early estimates show energy prices rising 2.5 percent year-on-year in April, after a 0.9 percent month-on-month decline in the preceding month. Food prices, meanwhile, eased their pace after a sharp surge, moving from a 14.7 percent year-on-year increase to about 10 percent. These movements illustrate the complexity of inflation dynamics, where some categories cool while others remain buoyant. For households, this mixed picture means that the affordability of essentials can still be under pressure even as overall inflation shows signs of relief in one sector or another.
Regarding services, prices climbed by 5.2 percent year-on-year in April, a touch higher than March and signaling ongoing demand-driven increases in areas like housing, transportation, and leisure services. Non-energy industrial goods, meanwhile, experienced a softer rise, with prices up roughly four-tenths versus March, reflecting competitive pressures and shifting consumer demand in the goods sector. This split underscores the broad scope of inflation influences across different segments of the economy and highlights the importance of tracking both services and goods alongside energy and food in understanding price trends.
In terms of country-level differences, Luxembourg recorded the smallest price gains among the available data, at about 2.7 percent. Belgium followed with roughly 3.3 percent, and Spain and Cyprus each posted about 3.8 percent. These comparatively smaller increases point to more contained inflation in certain fiscally stable economies with competitive markets or favorable energy mixes. Conversely, Latvia, Slovakia, Lithuania, and Estonia reported more pronounced price accelerations, ranging from 13.2 to 15 percent, reflecting greater sensitivity to energy costs, supply chain pressures, and local demand conditions. Taken together, the spread across member states illustrates the heterogeneous inflation landscape within the euro area and the continued need for careful, targeted policy responses to differing national contexts.