Driven by high oil and gas costs, consumer prices climbed 8.1 percent in May.
(Photo: Reuters)
Berlin, Brussels Eurozone manufacturer prices are rising at record speed due to rising costs in the energy sector. Producer prices in industry in April were 37.2 percent higher than a year earlier, according to the statistics office Eurostat on Thursday. Economists polled by Reuters had even expected an increase of 38.5 percent. In March, the increase was still at the old record of 36.9 percent.
In energy alone there was a strong increase of 99.2 percent this time. The prices for the intermediate goods important in production increased by more than 25 percent. Producer prices are regarded as a leading indicator for the development of inflation.
In the statistics, the prices are listed from the factory gate – i.e. before the products are further processed or sold. You can thus give an early indication of the development of consumer prices.
Inflation is currently on the rise in the euro area and has shot well above the European Central Bank’s (ECB) target of two percent. Driven by the high cost of oil and gas, consumer prices climbed 8.1 percent in May – the highest level since monetary union began.
Top jobs of the day
Find the best jobs now and
be notified by email.
This puts the pressure on the monetary watchdogs to end the zero interest rate policy after years of wide-open monetary floodgates. Other major central banks, such as the US Fed, have already raised interest rates in response to the strong inflation.
ECB President Christine Lagarde recently announced that the monetary authorities would probably end the era of negative interest rates by the end of September. Experts are currently assuming that the central bank will first decide to end its government bond purchases at its interest rate meeting on June 9 and then raise interest rates for the first time in July. It would be the first rate hike since 2011.
More: Six reasons for the high inflation – and what helps against it