Key Points

• Inflation in the eurozone remained steady at 2.2% in April, according to preliminary data from Eurostat.

• Reuters surveyed economists who predicted the rate would fall to 2.1% in April, down from March's 2.2%.

• Core and services inflation figures both showed an uptick compared to March's numbers.

Shoppers buy fresh vegetables, fruit, and herbs at an outdoor produce market under green-striped canopies in Regensburg, Upper Palatinate, Bavaria, Germany, on April 19, 2025.

Michael Nguyen/NurPhoto via Getty Images

The eurozone's inflation rate held steady at 2.2% in April, defying forecasts that predicted a decline, according to preliminary figures released by Eurostat on Friday.

Economists surveyed by Reuters anticipated the inflation rate would drop to 2.1% in April, down from March's 2.2%, as inflation trends move closer to the European Central Bank's 2% target.

Core inflation, excluding volatile items like food, energy, alcohol, and tobacco, rose to 2.7% from March's 2.4%. Services inflation also increased, reaching 3.9% compared to the previous 3.5% reading.

Following the data release, the euro strengthened against both the U.S. dollar and the British pound. Bond yields remained mostly unchanged, with the yield on 10-year German bonds trading about 3 basis points higher.

The rise in services inflation was likely influenced by "Easter timing effects," noted Franziska Palmas, senior Europe economist at Capital Economics. She suggested these effects would reverse in the coming month, potentially paving the way for further interest rate cuts by the European Central Bank.

“We expect the services rate to decline significantly throughout the rest of this year as U.S. tariffs impact activity and the labor market continues to soften,” Palmas added.

Michael Field, chief equity strategist at Morningstar, advised caution, pointing out that tariff uncertainties make any comfort level "precarious." He warned that an escalation in tariff tensions could lead to a surge in European inflation.

Field noted that additional ECB rate cuts remain a possibility. “This relatively low level of headline inflation eases pressure on the ECB, allowing for further interest rate reductions,” he stated.

ECB President Christine Lagarde told CNBC last week, “We’re moving towards our [inflation] target by 2025, indicating that the disinflationary process is well on track.”

Lagarde and other policymakers warned last week that the medium-term inflation outlook is less certain, with factors such as potential European countermeasures against U.S. tariffs and fiscal changes like Germany’s major infrastructure package coming into play.

Lagarde emphasized that the ECB would be "extremely data-dependent" when making interest rate decisions. The central bank recently cut interest rates last month, lowering its key rate — the deposit facility rate — to 2.25%, down from a high of 4% in mid-2023.

Several major eurozone economies released their latest inflation figures earlier this week, harmonized for comparison across the bloc. Germany’s statistics office announced on Wednesday that it expects consumer prices to have risen by 2.2% in April, below the previous month’s figure but slightly higher than anticipated. Meanwhile, French harmonized inflation came in at 0.8%, also slightly ahead of expectations.

Data released earlier this week indicated that the eurozone economy might be gaining momentum, with the bloc’s gross domestic product increasing by 0.4% in the first quarter of 2025, according to preliminary figures. This was higher than the forecasted 0.2% and followed a revised 0.2% growth in the last quarter of 2024.

However, growth is widely expected to slow in the coming months due to global tariff repercussions.

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