The annual inflation rate in the Eurozone was confirmed at a record high of 5.1% in the first month of 2021, well below 0.9% a year earlier, a report published by Eurostat on Wednesday showed, confirming preliminary figures.
The price surge was driven by the rising cost of energy (up by 28.8%); followed by services (2.3%); food, alcohol & tobacco (3.5%); and non-energy industrial goods (2.1%). Excluding energy, inflation stood at 2.5%, the European Union's statistical office said.
In the whole EU, annual inflation was 5.6% in January 2022, up from 5.3% in December. A year earlier, the rate was 1.2%.
The lowest annual rates were registered in France (3.3%), Portugal (3.4%) and Sweden (3.9%). The highest annual rates were recorded in Lithuania (12.3%), Estonia (11.0%) and Czechia (8.8%). Compared with December, annual inflation fell in eight Member States and rose in nineteen.
The ECB maintained key interest rates at record low levels in its February monetary policy meeting and pledged to reduce steady its bond purchases this year, despite the record rise in inflation. Still, during the press conference, President Lagarde said that inflation risks are on the upside but pressures should ease and that in March the central bank will be in a better position to assess the monetary policy. She also declined to rule out an interest rate rise this year saying the bank would assess conditions very carefully and there were "no pledges without conditionalities".
Meanwhile, traders see inflation as having the biggest impact on world markets in 2022, while liquidity was the top daily trading challenge for a sixth year, according to an annual survey of institutional trading clients by JPMorgan published on Wednesday.
The next flash estimate of eurozone's inflation with data for February 2022 is scheduled for 2 March 2022. Eurostat refers to inflation as the change in the price level of consumer goods and services during a given period.
The eurozone consists of Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. The European Union includes Belgium, Bulgaria, Czechia, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden.