Inflation In Eurozone Hits All-Time High

Inflation in the euro area accelerated to 5% in December, reaching an all-time high. Energy was the main driver of price increases, but higher prices for products, services and imported goods also exceeded the European Central Bank’s targets.

Annual inflation in 19 euro zone countries accelerated to 5% in December, according to preliminary data from Eurostat. This is the highest level since the introduction of the single currency in the eurozone, writes the Financial Times. Last inflation record in Europe was set in November, reaching 4.9%.

As noted by Reuters, a sharp jump was a surprise to analysts who expected a slowdown in inflation by the end of 2021 to 4.7%. Meanwhile, the eurozone recorded deflation of 0.3% in December 2020.

The main driver of price rises in Europe remains energy, the cost of which soared by 26% year-on-year last month. However, the rise in prices for food, services and imported goods also far exceeded the European Central Bank’s (ECB) overall target of 2%, Reuters wrote.

Although most analysts expect inflation to slow from January, it is expected to remain above the ECB’s target for most of 2022, says the FT.

source: ft.com, reuters.com

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