Services Inflation Is the Part That Has Not Come Down
Silver Data Lab Research Desk · Statistical analysis · Published on 09 February 2026
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- Data source
- Eurostat
- Reference period
- 2025
- Last updated
- 22 August 2026
Key estimates
- Services prices in the EU rose 3.7% in 2025, against 2.8% for food and -0.6% for energy.
- Estonia records 9.6%, Romania 8.0% and Slovakia 8.0%.
- France records 2.2%, Luxembourg 2.5% and Italy 2.9%.
- Services is the only major component of the index that rose faster than the headline rate.
- Because services are labour-intensive, their prices follow wages, which is why this component moves last.
The component that lags
Consumer prices divide into goods and services, and the two behave differently. Goods prices follow commodity costs, exchange rates and shipping, all of which move quickly. Services prices follow wages, which move slowly and infrequently.
In 2025 that difference produced a clear result. Energy fell 0.6% across the Union, food rose 2.8%, and services rose 3.7% — faster than either, and faster than the headline rate.
Why services move last
A restaurant meal, a haircut, an insurance policy and a plumber's visit are mostly labour. When labour costs rise, service prices follow, but only once contracts are renegotiated and price lists reprinted.
The wage increases that followed the 2022 energy shock were agreed through 2023 and 2024, and they reach service prices afterwards. That lag is why services inflation is still elevated in a year when the shock that caused it has reversed.
The unit labour cost study on this site records the underlying movement: EU unit labour costs rose 19.6% over five years, and considerably more in several Member States.
Where it is fastest
Estonia records 9.6%, Romania 8.0%, Slovakia 8.0% and Croatia 7.4%. These are Member States where wages have risen fastest, and the correspondence with the unit labour cost ranking is close: Romania at 158.9 and Lithuania at 153.8 on that measure sit alongside their positions here.
Estonia's 9.6% is more than four times the French rate in the same year, inside the same currency union.
Where it is slowest
France records 2.2%, Luxembourg 2.5% and Italy 2.9%.
Italy at 2.9% and France at 2.2% are the two large economies with the slowest wage growth in the Union, and their services inflation follows. Greece, whose unit labour costs rose least of all, is not far above them.
What this implies for monetary policy
A central bank looking at a headline rate close to target in 2025 was looking at a number held down by falling energy and held up by services.
Energy will not fall indefinitely. If services inflation persists at 3.7% while the energy contribution returns to zero, the headline rate rises without anything new happening. That is the reason services inflation is watched more closely than its share of the basket would suggest, and why the dispersion across Member States — 7.4 percentage points — matters for a single monetary policy applied to all of them.
Services price inflation, 2025
| Country | annual average % change | Gap to EU averagepercentage points, derived |
|---|---|---|
| Estonia | 9.6 | +5.9 |
| Romania | 8.0 | +4.3 |
| Slovakia | 8.0 | +4.3 |
| European Unionaggregate | 3.7 | — |
| Italy | 2.9 | −0.8 |
| Luxembourg | 2.5 | −1.2 |
| France | 2.2 | −1.5 |
What these figures cannot tell you
- An annual average rate
- The figure compares average 2025 prices with average 2024 prices and does not show the path within the year or the position at its end.
- Services is a broad and uneven category
- It combines housing-related services, transport, communication, recreation, education, restaurants and insurance. National baskets weight these differently, and a country's rate can be driven by one large component.
- Administered prices sit inside it
- Public transport fares, education fees and some health services are set or regulated by governments in several Member States. Where they are adjusted infrequently, the index moves in steps rather than continuously.
- The wage link is an explanation, not a measurement
- The account offered here — that services prices follow wages with a lag — is consistent with the unit labour cost data on this site but is not established by this extraction, which contains prices only.
Frequently asked questions
- How fast are service prices rising in the EU?
- 3.7% in 2025, against 2.8% for food and -0.6% for energy. Services was the only major component of the index rising faster than the headline rate.
- Why is services inflation higher than goods inflation?
- Because services are mostly labour, and their prices follow wages. Wage increases agreed after the 2022 energy shock reach service prices only once contracts are renegotiated, so this component moves last and falls last.
- Which EU country has the highest services inflation?
- Estonia, at 9.6% in 2025, with Romania and Slovakia both at 8.0%. These are Member States where wages have risen fastest, and their positions match their ranking on unit labour costs.
- Why does services inflation matter for interest rates?
- Because a headline rate near target in 2025 was held down by falling energy and held up by services. If energy stops falling while services inflation persists, the headline rate rises with nothing new having happened.
Methodological note
This study uses the services special aggregate of the harmonised index of consumer prices, as the annual average rate of change for 2025.
Values cover all 27 Member States and the EU aggregate as published. The food and energy figures quoted for comparison come from the same extraction with different category filters, archived together.
The correspondence between services inflation and unit labour cost growth is an observation by Silver Data Lab across two separate studies on this site and is not a statistical relationship estimated here.
Source data
The underlying series can be inspected and re-downloaded from the Eurostat data browser. The filters below are the ones applied.
HICP - annual data (average index and rate of change)
prc_hicp_aind
- Filters applied:
- freq=A · unit=RCH_A_AVG · coicop=SERV · time=2025
- Extracted:
- 2026-08-11
- Source last updated:
- 2026-02-06
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