The latest data from February 2026 indicates a significant slowdown in price dynamics in Germany, where the inflation rate fell to 1.9%. This result surprised analysts, who had expected higher readings. This situation contrasts with data from France and Spain, which recorded price increases or stabilization, posing a difficult choice for the European Central Bank regarding future interest rate policy.
Drop in inflation in Germany
The price growth indicator in Europe's largest economy fell to 1.9% in February, dropping below the ECB's inflation target.
Contrast in France and Spain
Preliminary data indicate a price rebound in France and stabilization at 2.3% in Spain, complicating the ECB's decisions.
Impact of energy prices
The main driver of the overall price level drop in Germany was the cheaper energy sector, while food prices increased.
Stabilization of the Euribor rate
The average monthly Euribor fell to 2.221%, offering slight relief to mortgage holders.
The German economy recorded a significant success in the fight against high prices in February 2026. The Federal Statistical Office Destatis reported that the annual rate of increase in consumer goods and services prices fell to 1.9%. This is the lowest result in many months, driven mainly by the cheaper energy sector and a drop in import prices at the beginning of the year. On a monthly basis, a slight increase of 0.2% was recorded. This data from the largest federal states, such as North Rhine-Westphalia, confirms the disinflationary trend, although the regional situation remains varied. For example, in Saxony, inflation remained unchanged, while in Hesse it stayed above the national average. Completely different sentiments prevail in the other key economies of the eurozone. In France, preliminary data indicated an unexpected price increase, mainly caused by a revision of energy tariffs. Spain, on the other hand, maintained inflation at 2.3%. These divergences between Berlin and Paris and Madrid complicate the task for the European Central Bank. On one hand, the drop in prices in Germany provides room for interest rate cuts; on the other hand, inflationary pressure in other countries suggests the need to maintain a restrictive course. Since the creation of the eurozone in 1999, the price stability framework has been set at a level close to, but below, 2 percent, which became the foundation of the common currency's credibility.This situation is also reflected in the financial market. The Spanish Euribor index fell to 2.221% in February, marking the second consecutive month of declines. While for many bank customers this means real relief in loan repayments, it is currently described as symbolic. At the same time, consumers across the eurozone, according to the latest research, have begun to lower their inflation expectations, which could be a positive psychological signal for the markets in the coming quarters. „Euro zone consumers cut some inflation expectations, ECB survey shows” — ECB Statement