Services and energy costs are driving consumer prices across the single currency area
Inflation in the euro area increased for the first time in five months in April, surging to 7%, the European Union’s statistics office reported on Wednesday, confirming preliminary data.
Eurostat said consumer prices had risen from 6.9% in March as higher services and energy costs offset a slowdown in food price growth.
Services inflation, which is primarily driven by labor costs, accelerated to 5.2% in April from 5.1% in the previous month. Energy prices were up again after a slight decline in March. Food, alcohol and tobacco prices were also up by 2.75% last month, but were lower than the 3.12% rise in March.
According to the report, core inflation – excluding food and energy prices – slowed to 7.3% from 7.5%, while an even narrower measure, which excludes alcohol and tobacco, declined from 5.7% to 5.6%.
Eurostat data showed that Latvia continued to struggle with the highest inflation at 15%, followed by Slovakia, Lithuania, and Estonia – all dealing with a double-digit surge in consumer prices among the 20-member Eurozone.
Inflation in the single currency area has been above the European Central Bank’s (ECB) 2% target for nearly two years, with the regulator repeatedly hiking rates since last July to curb double-digit growth in consumer prices. The ECB once again increased rates last week to 3.25%, and has promised another hike at its next meeting in June.
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