People wearing face masks compulsorily walk on the street in Dortmund, Germany
Highlight
- Consumer prices rose at a record rate in the 19 countries that use the euro currency.
- According to Eurostat, inflation rose to 5% in December compared to a year earlier.
- This is the highest level in the eurozone since record-keeping began in 1997, breaking a record 4.9%.
Consumer prices in 19 countries that use the euro currency rose at a record rate, leading to increased food and energy costs, data showed on Friday.
Inflation rose to 5% in December compared to a year earlier, according to the EU statistical office Eurostat. This is the highest level in the eurozone since record-keeping began in 1997, only breaking the record of 4.9% set in November.
According to Eurostat data, energy costs again jumped at an annual rate of 26% in December, although it was slightly lower than the previous month. A strong rise in food costs contributed to the increase in overall inflation, which rose to 3.2% from the 2.2% rate posted in November.
Rising prices complicate problems for policymakers at the European Central Bank who are keeping interest rates ultra-low to stimulate the economy as it recovers from the coronavirus pandemic.
Central banks elsewhere are raising interest rates to fight or take steps in that direction, despite the omicron type of COVID-19 rising and its uncertain effects on the global economy.
The Bank of England became the first central bank in a major advanced economy to raise interest rates since the pandemic began. The European Central Bank has taken a much more cautious stance, but has also decided to begin cautiously dialing up some of its stimulus efforts over the course of the next year.
The US Federal Reserve is moving faster than Europe as consumer prices in November rose 6.8% over the previous year, the highest such inflation rate in 39 years.
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