Eurozone inflation hits historic high

Spiking energy prices are the major driver, data shows

Consumer prices in the 19 countries that use the euro currency rose by an annual rate of 7.5% in March, according to data released on Friday by the European Union statistics agency. Spiking energy costs are the main factor driving inflation higher, Eurostat said.

It’s the fifth straight month that inflation in the eurozone has set a record, bringing it to the highest level since recordkeeping for the euro began in 1997. The latest reading smashed the 5.9% high set in February.

Consumer prices have been surging around the world lately, making it more difficult for people to afford everything from groceries to their utility bills.

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Data shows food, alcohol, and tobacco costs across the Eurozone climbed 5% in March, compared with 4.2% in the prior month, while prices for goods like clothing, appliances, cars, computers, and books rose 3.4%, up from 3.1%. Service prices were also up by 2.7%, versus the previous 2.5%.

Some economists have been raising concerns whether the trade bloc will enter a recession in 2022, after energy prices skyrocketed 44.7% last month, up from 32% in February.

European Central Bank President Christine Lagarde said this week that “three main factors are likely to take inflation higher” going forward. According to Lagarde, “energy prices are expected to stay higher for longer,” “pressure on food inflation is likely to increase,” and “global manufacturing bottlenecks are likely to persist in certain sectors.”

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