Inflation in the Eurozone is at 1.9% in February, but the energy specter is revived by the war in Iran

Inflation Rebound Driven by Services and Less Deflationary Energy

According to Eurostat's flash estimate, the annual inflation rate in the eurozone is 1.9% in February 2026, up from 1.7% in January. This 0.2-point increase breaks away from the continuous disinflation trend observed since February 2025, when the rate still stood at 2.3%. Services remain the main driver of price increases, with an estimated annual rate of 3.4% compared to 3.2% in January. Industrial goods excluding energy are also accelerating, rising from 0.4% to 0.7%. Food remains stable at 2.6%. On the energy front, the component remains negative at -3.2%, but has substantially improved compared to -4.0% in January, thus reducing its dampening effect on the overall index. On a monthly basis, the Harmonized Index of Consumer Prices (HICP) rose by 0.7% in February. National disparities remain pronounced: France maintains a contained inflation rate of 1.1%, well below the eurozone average, while Slovakia (4.0%), Croatia (3.9%), and Estonia (3.2%) are experiencing significantly higher rates.

War in Iran and energy shock: the equation becomes more complex for the ECB

This statistical rebound occurs in a concerning geopolitical context. IMF Managing Director Kristalina Georgieva warned on March 5 that the war in the Middle East could affect global energy prices, growth, and inflation, stating that « uncertainty is now the new norm. » Analysts are already noting a simultaneous rise in oil and natural gas prices, fueling fears of a widespread increase in energy costs. The dollar is strengthening by nearly 1% against the euro, driven by the rise in oil priced in US currency, while gold is up 2.53% to $5,412 an ounce, confirming a move toward safe-haven assets. For the European Central Bank, which has maintained its deposit rate at 2% since summer 2025, the situation is delicate. Philip Lane stated that the institution would closely monitor the evolution of the situation. The risk is that the energy shock related to the conflict could wipe out the progress made since the post-Ukraine invasion inflation episode, forcing the ECB to delay any further monetary easing.

Key Areas of Focus: Energy, March Data, and National Discrepancies

Several elements warrant close attention in the weeks ahead. First, the complete February data, expected on March 18th, will either confirm or modify this preliminary estimate. Next, the trajectory of energy prices will be crucial: if the conflict in Iran persists, the energy component could return to positive territory, significantly increasing overall inflation. The divergence between France (1.1%) and the eurozone average (1.9%) highlights very heterogeneous price dynamics, complicating the calibration of a single monetary policy. Lastly, GDP data from the last quarters of 2025 show modest growth in the eurozone, underscoring the fragility of the recovery in the face of potential external shocks. The trade-off between supporting growth and controlling inflation could become the central dilemma in the coming months.