Central banks

Euro area financial markets hold significant untapped potential: deeper cross-border integration would improve the allocation of savings, lower the cost of capital and strengthen capacity to finance investment and innovation. To assess how the integration of euro area equity markets has evolved over time, this box applies a structural gravity model, the workhorse of international trade analysis, to bilateral euro area equity holdings.

The European Central Bank (ECB) defines its price stability target in terms of the HICP, the official measure of consumer price inflation in the euro area. Several changes have been implemented in the compilation of the HICP as of the January 2026 data release. Most importantly, the European Classification of Individual Consumption according to Purpose (ECOICOP) version 2 has been introduced for consumer goods and services. This box describes the main features of the new classification and outlines its impact on the HICP.

Celso Brunetti, Jeffery H. Harris, Ioannis SpyridopoulosNo, in the mortgage market. Using confidential micro-level data combining mortgage contracts with credit and repayment records for 44 million loans spanning 5,000 bank mergers over nearly three decades, we find no changes to mortgage rates, approval rates, or delinquency rates. Local mortgage markets remain remarkably competitive despite consolidation, averaging over 100 active lenders in each county every post-merger quarter.

This article examines the drivers and macroeconomic implications of the recent significant expansion of the euro area labour force, which reached a record high of 173 million people in 2025. The increase reflects rising labour force participation across demographic groups and sustained net migration, with older, more educated and foreign workers accounting for much of the growth.