MNI Eurozone Inflation Insight – March 2026

Energy Picks Up but Less Than Expected

Click here for full publication 

Eurozone March headline HICP printed marginally below consensus at 2.52% Y/Y (vs 2.6% MNI median, 1.89% prior), with downside surprises centred in Spain and Italy. Core HICP decelerated to 2.26% Y/Y (vs 2.41% prior), in line with expectations. While the print showed a pronounced energy acceleration as a result of the Middle East conflict, the pick-up in the category was a little less than expected at 4.93% Y/Y - we had seen multiple analysts look for a high 5-handle. At the Eurozone-wide level, flash-level details suggest any feedthrough to other sub-categories has been limited so far. More information will be available in the final country-level and Eurozone data due over the coming weeks, but broader evidence of indirect effects will be a key focus in the April round - released the day of the ECB’s April 30 decision.

ECB Governing Council speakers have been preparing markets for some degree of policy tightening in the coming months, consistent with ECB-dated OIS pricing ~75bps of hikes through year-end. President Lagarde has highlighted that leaving an energy-driven inflation overshoot "entirely unaddressed could pose a communication risk: the public may find it difficult to understand a reaction function that does not react". However, an April hike remains in the balance, with incoming survey data likely to provide a more important signal than spot inflation readings for the time being.