Eurozone inflation hit a record 7.4% in April, boosted by rising fuel and food costs, the EU statistics agency said on Wednesday, lowering its preliminary estimate of 7. 5%.
Inflation has skyrocketed over the past year, first due to post-Covid supply bottlenecks and later due to the effects of Russia’s war in Ukraine, which pushed up prices for everything from raw materials to industrial goods.
Price pressures are now so widespread that even core inflation, which eliminates volatile food and fuel costs, is well above the European Central Bank’s 2% target, indicating that the sharp rise in prices risks root.
Inflation excluding energy and food accelerated to 3.9% in April from 3.2% in March, while an even tighter measure that also eliminates alcohol and tobacco rose from 3% to 3.5%, Eurostat reported.
This inflation result is the main reason the ECB is expected to raise interest rates in July, kicking off what is likely to be a string of moves that could lift its -0.5% deposit rate back into positive territory before of the end of the year.
ECB officials are increasingly concerned that rising inflation is now here to stay and that tighter monetary conditions are needed to bring it back to below 2%.
Source: CNN Brasil
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