Inflation hits record of 5 percent in eurozone

Inflation hits record of 5 percent in eurozone

Inflation hits record of 5 percent in eurozone

Consumer prices in the 19 countries that use the euro currency soared at a record rate, led by a surge in food and energy costs, figures showed on Jan. 7.

Inflation rose to 5 percent in December 2021 compared with a year earlier, according to Eurostat, the European Union’s statistical office.

That is the highest level in the eurozone since recordkeeping began in 1997, breaking the record of 4.9 percent only just set in November 2021.

Energy costs spiked again in December, jumping at an annual rate of 26 percent, though that was a bit lower than the previous month, according to Eurostat’s data.

A stronger rise in food costs contributed to the increase in overall inflation, picking up pace to 3.2 percent, higher than the 2.2 percent rate posted in November.

Soaring prices are compounding problems for European Central Bank policymakers who have been keeping interest rates at ultra-low levels to stimulate the economy as it recovers from the coronavirus pandemic.

Despite the Omicron variant of COVID-19 surging and its uncertain effects on the global economy, central banks elsewhere have been raising interest rates to fight soaring inflation or taking steps in that direction.

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