Quick overview

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Inflation in the eurozone accelerated again in April, reaching 3% year over year, driven primarily by a sharp increase in energy prices.

Consumer prices across the euro area rose more than expected, according to preliminary data released by Eurostat. Energy prices surged 10.9% annually, up sharply from the 5.1% increase recorded in March, becoming the main driver behind the renewed inflationary pressure.

The reading marks the strongest increase in the eurozone’s cost of living since September 2023.

Among the other major components, services inflation eased slightly to 3.0%, down 0.2 percentage points from the previous month. Meanwhile, food, alcohol, and tobacco prices rose 2.5%, while non-energy industrial goods increased 0.8%, accelerating from March levels.

Inflation Diverges Across Europe

Among eurozone members, Finland recorded one of the lowest inflation rates at 2.3%, followed by Malta at 2.4%, while Netherlands and France both posted 2.5%.

At the other end of the spectrum, Bulgaria recorded the highest inflation rate at 6.2%, followed by Croatia at 5.4% and Luxembourg at 5.2%.

Core inflation—which excludes volatile food and energy prices—eased slightly to 2.2% in April from 2.3% the previous month.

ECB Faces Renewed Inflation Pressure

According to the latest projections from the European Central Bank, headline inflation is expected to average 2.6% in 2026, 2.0% in 2027, and 2.1% in 2028. Core inflation is projected at 2.3% in 2026, 2.2% in 2027, and 2.1% in 2028.

Analysts at ING Group noted that the rebound was largely expected due to higher energy prices, though they also warned that deflationary pressures in goods prices appear to be fading gradually.

“Given that energy prices are likely to remain elevated in the coming months after falling throughout 2025, their contribution to headline inflation should increase further,” ING analysts said.

The bank also warned that food prices could accelerate later this year due to fertilizer shortages. Unprocessed food prices are already rising at an annual pace of 4.7%, a trend that could eventually feed into higher processed food inflation with some delay.

In addition, analysts cautioned that second-round effects from the energy crisis cannot be ruled out, as selling-price expectations have risen sharply across multiple sectors of the economy.

ING now believes inflation could gradually climb toward 4% if current pressures persist.