Germany January inflation rises to 2.1% as ECB cuts key rate to 2.75%

On Thursday, the European Central Bank reduced its key rate by 25 basis points to 2.75%, the fifth straight cut since June. On Friday, the German statistics office said January inflation was 2.1%, up from 2.0% in December, contrary to expectations for a flat reading. Eurozone output improved in Q4 2025, with Germany expanding 0.3% while Spain, France, and Italy also posted gains.