EUROZONE inflation soared last month to its highest annual rate since records began in 1997, the Eurostat agency said today.

The 5% figure is a first estimate but confirms a trend led by soaring energy prices, rising from 4.9% in November to a quarter-century high.

These figures are well above the European Central Bank’s target of 2.0% inflation in the eurozone.

But the ECB believes that this inflation is transitory and should fall next year, after peaking this year.

The surge in prices in recent months is mainly due to the exceptional rise in gas and electricity prices.

Last month, the annual increase in energy prices reached 26%, far ahead of the other products surveyed in Eurostat’s basket.

Food, alcohol and tobacco prices nevertheless rose by 3.2%, ahead of industrial goods on 2.9% and services at 2.4%. 

Among large countries, the highest increases were in Spain at 6.7% and Germany at 5.7%.

Conversely, prices remained more moderate in Italy and France, according to harmonised European data calculated by Eurostat. 

Inflation was particularly high in the Baltic States, with the highest level for the euro area recorded by Estonia at 12% and Lithuania with 10.7%. – AFP, January 7, 2022.