Tuesday, March 28

Inflation in the euro zone shoots up to 5.8% and marks a new record

Annual inflation in the euro zone climbed to 5.8% in February 2022, compared to 5.1% in January, and marks a new maximum, the highest figure since the creation of the euro. This is reflected in the preliminary estimate by Eurostat, the statistical office of the European Union.

If the main components of inflation in the euro area are analyzed, energy registered the highest annual rate in February (31.7%, compared to 28.8% in January), followed by food, alcohol and tobacco (4.1%, compared to 3.5% in January), non-energy industrial goods (3.0%, compared to 2.1% in January) and services (2.5%, compared to 2, January 3).

Core inflation (which excludes the most volatile components, such as energy, non-processed foods, alcohol and tobacco) grew from 2.3% in January to 2.7% in February.

The largest price increases were registered in Lithuania (13.9%), Estonia (12.4%) and Belgium (9.6%). Inflation in Spain stands at 7.5%. The countries with the least increase in prices were: France (4.1%), Finland and Malta (4.3%) and Portugal (4.4%).

Last Friday, the European Central Bank (ECB) considered it “premature” to assess the economic impact of the war in Ukraine, but it anticipated a rise in inflation and also more uncertainty.

Lagarde noted, reports Efe, that gas prices are now six times higher than they were a year ago and oil prices are 44% higher. The ECB will present a revision of its inflation forecasts on March 10.

Lagarde recalled that the institution she presides over has a double mandate, “price stability and financial stability” that will guide the evaluations made of the new situation and the monetary policy actions, when asked about possible interest rate hikes this year.

For now, he said that answering that question at this time “would be premature” and that before doing so the situation will be examined “in detail.”

“The ECB”, he repeated, “closely follows the evaluation of the situation” and is willing to take measures to “guarantee price stability” and “financial stability”.