The European Central Bank’s fears about inflation appear to be materialising. Eurozone “core,” or underlying, inflation has reached the highest level in more than two years, according to Eurostat, the European Union’s statistical office. Excluding volatile energy and unprocessed foods, consumer prices rose at an annual rate of 1.8 per cent in April – up from 1.5 per cent in March and the highest since January 2009. The surge suggests higher headline inflation rates caused by commodity prices are feeding through into broader price pressures.
The late timing of Easter might have distorted the figures by delaying usual price-cutting offers. The ECB is also not a big fan of “core” measures, which it sees lagging indicators of underlying trends. Jürgen Stark, executive board member, once described them as “well suited for central bankers who don’t eat or drive”. Read more