Eurozone Inflation and EURIBOR: What to Expect in the Near Term
Eurozone inflation accelerated to 2.3% in November, up from 2% in October, marking the steepest increase since July. This uptick has prompted reassessment among economists and investors as they anticipate the next European Central Bank (ECB) meeting and the potential scale of any interest rate reductions.
The November increase in the inflation rate was largely driven by less favorable base effects resulting in lower energy resource deflation. However, underlying inflation remained steady at 2.7% for the third consecutive month, sustained by relatively strong growth in service prices within the Eurozone, which rose 3.9% in November. Food price increases remained relatively stable, increasing by 2.8% across the region after an acceleration in October.
Analysts surveyed by “Bloomberg” predict that inflation in the Eurozone will fluctuate around the 2% mark in the coming year. Market expectations, as indicated by futures contracts, currently suggest the ECB will lower interest rates by an additional 0.25 percentage points at its meeting in the coming weeks, following a similar reduction after nearly two weeks.
The Euribor rates, which serve as a benchmark for a wide range of financial products across Europe, are closely monitored in this environment. As of February 20, 2026, the Euribor rates stood at: 1-week 1.884%, 1-month 1.942%, 3-months 2.024%, 6-months 2.141%, and 12-months 2.205%. These rates are based on the average interest rates at which a panel of European banks borrow funds from each other.
The Euribor rates are considered the most significant reference rates in the European money market, influencing pricing and interest rates for financial products such as interest rate swaps, futures, savings accounts, and mortgages. The fluctuations in these rates are therefore of significant interest to both financial professionals and individual consumers. There are currently five different Euribor rates, down from fifteen prior to November 1, 2013. Alongside Euribor, the 1-day European interbank interest rate, known as ESTER, is also tracked.
Investors are paying close attention to the interplay between inflation data and the ECB’s monetary policy decisions, as these factors will likely shape the trajectory of interest rates and overall economic conditions in the Eurozone.
