Thu 03 March 2022:
Eurozone inflation rose to a new high in February, according to Eurostat, the European Union’s official statistics agency. Inflation was at 5.8%, and energy prices were skyrocketing.
The increase, up from 5.1 percent in January, came as oil and gas prices soared even higher amid concerns about the impact of Russia’s invasion of Ukraine on supplies.
For the first time since 2014, Brent crude surpassed USD 110 per barrel. Hours later, WTI followed suit. It climbed to its highest point since 2013. Natural gas prices in Europe also reached new highs.
The surge in inflation comes at a difficult time for European leaders as they warn their citizens of the “price to pay” from tough sanctions imposed on Russia, the EU’s leading foreign gas supplier.
Policymakers fear soaring inflation could choke off the EU’s recovery from the coronavirus pandemic.
Eurostat said energy prices in February jumped 31.7 percent, faster than the 28.8 percent recorded in January.
Food prices were up 4.1 percent in February, compared with 3.5 percent the previous month.
Analysts at Capital Economics predicted inflation would hit six percent in the coming months before falling back to around four percent, “most likely” at the end the year.
That’s still more than double the European Central Bank’s two percent aim.
Because of the situation in Ukraine, a key wheat producer, Capital Economics warned that not only oil prices, but also food prices, could climb higher.
The European Union and its Western allies have imposed broad sanctions on Russia in response to President Vladimir Putin’s invasion.
They’ve wreaked havoc on Russia’s economy, forcing the Kremlin to implement capital controls.
SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES
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