Eurozone annual inflation rate accelerates to record 5.9% in February

The euro zone’s annual consumer inflation rate (CPI) hit an all-time high of 5.9% in February, surpassing the previous record of 5.1% in January, according to final data released on Thursday. on Monday (17) by the European Union’s statistics agency, Eurostat.

The February result was above the preliminary reading and the expectations of analysts consulted by the The Wall Street Journalof 5.8% in both cases.

Record CPI amplifies pressure on the European Central Bank (ECB) to tighten its monetary policy. The ECB’s inflation target is 2%. Compared to January, the eurozone CPI rose 0.9% in February, as expected.

Only the bloc’s core CPI, which disregards energy and food prices, had an annual gain of 2.7% in February, confirming the previous estimate. In comparison with January, the core index increased by 0.5% in the last month.

“ECB will take necessary measures if effects of war grow”

ECB President Christine Lagarde said on Thursday that the institution remains open the option of taking any necessary measures if the economic consequences of the conflict between Russia and Ukraine intensify.

Speaking at a conference in Frankfurt, Germany, Lagarde explained that the war poses a “significant risk” to the growth of the eurozone economy.

According to her, Europeans must face high inflation and slow economic expansion, at least in the short term. “The main risks are through energy prices and confidence,” she said.

Even so, the central banker highlighted that there was an improvement in the medium-term inflationary scenario. In her view, it is “increasingly likely” that inflation will stabilize at the 2% target.

“This was the perspective that led us, in December of last year, to start gradually reducing the pace of our asset purchases”, he pointed out.

“If necessary, we can design and implement new instruments to ensure the transmission of monetary policy as we move along the path of policy normalization, as we have shown on many occasions in the past,” he added.

Lagarde also commented that fiscal policy can cushion the effects of tensions in Eastern Europe. For her, the picture revealed Europe’s economic dependence on “hostile actors”. “We made it clear that future rate adjustments, when they come, will be gradual,” she said.

Source: CNN Brasil

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