Saudi Press

Saudi Arabia and the world
Saturday, Feb 21, 2026

Is the cost of living crunch starting to ease?

Is the cost of living crunch starting to ease?

Eurozone figures are expected to show inflation slowed down in December, bringing hopes of relief to consumers and governments.

Inflation in the eurozone is expected to have fallen sharply at the end of 2022, giving some reprieve to people struggling to pay bills — and to leaders feeling their wrath.

Record-high rates are expected to have returned to single digits in December, with national data from Germany, France and Spain in recent days showing price increases easing more quickly than forecast. In Italy, inflation also came off its peaks.

Hotly anticipated figures for the eurozone as a whole are released on Friday.

Government programs to limit gas prices as well as falling energy costs and a stronger euro contributed to signs that Europe may be able to start putting the worst of the cost-of-living crisis behind it. That will come as a relief to leaders battling pan-European waves of public discontent, protests and strikes.

Before national data trickled in, a Reuters survey of analysts pointed to inflation slowing to 9.7 percent in December from 10 percent in November. More recent estimates, including those of Pantheon Macroeconomics’ economist Claus Vistesen, put the figure around 9 percent.

Slower price rises will be welcome in Berlin, where government popularity has fallen massively ahead of key regional elections. Increasing numbers of voters fear inflation will undermine private wealth, a key survey showed. Germany's ruling coalition is falling in opinion polls and is on track to lose its majority in the parliament.

In France, the government is keeping a close watch on inflation as it prepares to launch a highly sensitive pension reform next week, framing it as part of a broader effort to improve the country’s economy and boost growth. While price rises in France have been lower than in most eurozone countries thanks to massive government support, the cost of living remains people’s No. 1 concern for the new year, according to opinion polls.

The government this week announced new measures to help small businesses, including the country’s cherished bakeries, cope with soaring energy bills.

Still, President Emmanuel Macron on Thursday struck a cautionary tone. “We're probably not at peak inflation yet,” he said. “We will have prices that go up.”

European Central Bank President Christine Lagarde has sounded equally circumspect.

She has said inflation may jump again in January and February, when previous spikes in energy prices are expected to reach the retail level, before coming down more sustainably later this year.

ECB forecasts from December still show inflation averaging 6.3 percent this year.


European Central Bank President Christine has come under fire from governments fearing the central bank’s tightening will push the eurozone economy into a deeper than necessary recession

And while governments may feel pressure on them is easing, the same can hardly be said for the ECB.

Lagarde has come under fire from governments fearing the central bank’s tightening will push the eurozone economy into a deeper-than-necessary recession, adding to the economic hardship of disgruntled voters.

Falling inflation at the same time as slowing economic activity will expose Lagarde to heftier criticism against her tightening course. Italy, under new Prime Minister Giorgia Meloni, has been particularly outspoken, with senior ministers attacking December's 0.5 percent interest rate hike and ECB pledges to do more as "baffling," "crazy" and “worrying."

While inflation coming down faster than expected may allow the Governing Council to raise interest rates less aggressively overall, the central bank will not shy away from further tightening as core inflation — which filters out volatile components such as food and energy — may still be on the rise and is running at more than three times the ECB’s 2 percent target.

ING economist Carsten Brzeski said the current inflation environment will likely see the ECB raise rates at the next two meetings by a total of one percentage point. It is only after new inflation forecasts become available in March that there could be momentum to pause the hiking cycle, he added. Markets are currently betting on a policy rate of 3.5 percent by mid-year, up from 2 percent now.

As Lagarde put it in December: “Anybody who thinks that this is a pivot for the ECB is wrong. We’re not pivoting, we’re not wavering.”

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Concerns Mount Over Potential Saudi Uranium Enrichment in Prospective US Nuclear Accord
Trump Directs Government to Release UFO and Alien Information
Trump Signs Global 10% Tariffs on Imports
Investability Emerges as the Defining Test of Saudi Arabia’s Next Market Phase
Saudi Arabia’s Packaging Market Accelerates as Sustainability and E-Commerce Drive Transformation
Saudi Arabia’s Strategic Minerals Drive Offers Lessons for Europe’s Supply Chain Ambitions
Saudi Arabia Unveils $32 Billion Push Into Theme Parks and Global Entertainment
Saudi Crude Exports to India Climb Sharply, Closing Gap With Russia
Saudi Arabia’s Halal Cosmetics Market Expands as Faith and Ethical Beauty Drive Growth
United Kingdom Denies U.S. Access to Military Base for Potential Iran Strike
ImmunityBio Secures Saudi Partnerships to Launch Flagship Cancer Therapy
Türkiye and Saudi Arabia Launch Expanded Renewable Energy Partnership
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
UK Intensifies Efforts to Secure Saudi Investment in Next-Generation Fighter Jet Programme
Saudi Arabia Tops Middle East Green Building Rankings with Record Growth in 2025
Qatar and Saudi Arabia Each Commit One Billion Dollars to President Trump’s ‘Board of Peace’ Initiative
Ramadan 2026 Prayer Times Set as Fasting Begins in Saudi Arabia and Egypt Announces Dates
Saudi Arabia Launches Ramadan 2026 Hotel Campaign to Boost Religious and Leisure Tourism
Saudi Arabia Seeks Reroute of Greece-Bound Fibre-Optic Cable Through Syria Instead of Israel
Saudi-Backed Scopely Acquires Majority Stake in Turkey’s Loom Games to Expand Mobile Portfolio
Zodiac Milpro Launches Zid Marine Joint Venture in Saudi Arabia to Expand Regional Shipbuilding
Saudi Arabia Reaffirms Reform Path Amid Claims of Ideological Reversal
Calls Grow for Saudi Arabia and UAE to Settle Differences Through Direct Dialogue
Jensen Huang just told the story of how Elon Musk became NVIDIA’s very first customer for their powerful AI supercomputer
British couple sentenced to 10 years in Iran for espionage
Former British Prince Andrew Arrested on Suspicion of Misconduct in Public Office
Unitree Robotics founder Wang Xingxing showcases future robot deployment during Spring Festival Gala.
Prince William Holds Talks with Crown Prince Mohammed bin Salman During Saudi Visit
Saudi Arabia’s Humain Commits $3 Billion Investment to Elon Musk’s xAI
SCOPA Executive Unveils Ambitious Relaunch Strategy for Saudi Production Company
Saudi Arabia Sees Rise in Business Visa Rejections Amid Tighter Compliance Checks
Saudi PIF Transfers Take-Two Stake to Savvy Games Group in Strategic Gaming Push
Jimmy Carr Says He ‘Loved’ Saudi Arabia Show Amid Debate Over Performing in the Kingdom
Sotheby’s ‘Origins II’ Auction Signals Saudi Collectors’ Shift Toward Cultural Legacy
EY and Microsoft Deepen Saudi Arabia Partnership with Launch of EY Studio+
Google Pay Launches Support for Mastercard Cards in Saudi Arabia
Saudi Arabia Bolsters Maritime Surveillance Fleet with Four C-27J Patrol Aircraft
Kazakhstan and Saudi Arabia Deepen Strategic Partnership with New Investment and Energy Agreements
Saudi Crown Prince Receives Written Message from Kazakhstan’s President Amid Expanding Strategic Ties
ImmunityBio Shares Rise After Saudi Arabia BCG Manufacturing Update Spurs Investor Optimism
Global Music Star Tyla Confirmed as Headliner at 2026 Saudi Arabian Grand Prix Entertainment Lineup
Somalia and Saudi Arabia Forge New Military Partnership Amid Regional Power Shifts
Saudi Arabia and Several Nations Criticize Israeli West Bank Land Measures as Diplomatic Tensions Rise
Saudi Public Investment Fund Transfers Stake in Take-Two Interactive as Portfolio Strategy Evolves
Saudi Arabia’s Flagship Defense Expo Highlights Industrial Ambitions and Expanding Arms Portfolio
Strategic Divergence Deepens as Saudi Arabia and UAE Recalibrate Gulf Partnership
Saudi Arabia Confirms Start of Ramadan as Crescent Moon Sighted, While Other Nations Begin a Day Later
Rubio Calls for Sweeping U.N. Reform, Saying It Has Failed to End Wars in Gaza and Ukraine
10,000 Condoms Distributed at Winter Olympics 2026 Athlete Village Depleted Within 72 Hours
Prince William Meets Saudi Crown Prince as Epstein-Andrew Fallout Casts Shadow
×