Inflation in the eurozone rose to five percent in December, the highest level since the introduction of the single European currency, the euro twenty years ago. This was announced by Eurostat, the European Statistical Office, in a quick estimate.
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Energy and food prices rose in particular. In the first case, statisticians report growth of 26 percent, food of 3.2 percent. Inflation was 4.9 percent in November. Data for the whole of the European Union do not include an estimate, they will be published later.
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Price growth also varies geographically, with prices jumping the least in Finland (3.2%), while the Baltic countries (Estonia, Lithuania) report jumps of more than 10 percent.
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Inflation in the euro area thus remains well above the European Central Bank’s (ECB) target of two percent. But it also exceeded analysts’ estimates, which they agreed on a 4.8 percent price jump, according to Bloomberg.
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ECB chief Christine Lagarde and her team have not yet taken any major steps against inflation, seeing it as a transitional wave. The US Fed has argued similarly in the past – but it has already curtailed bond purchases and is announcing interest rate increases this year. Frankfurt central bankers have not reported any of this yet.
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“Inflation is gaining momentum not only in the Czech Republic, but also in the entire euro area, and its curve is discovering new, thirty-year highs. The factor is quite clear – energy prices are a quarter higher on ‘euro invoices’. The smaller Baltic states are the sad ‘leaders’ of the eurozone. There, in two out of three countries, inflation even exceeds double digits. Unfortunately, we cannot talk at all about the end of price increases. From a long-term perspective, we are more at the beginning of one episode, “commented Jana Mücková, an economist at the LOGeco investment group.
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