Prices in the euro zone continued to rise at the end of the year, driven by soaring energy costs. Inflation is higher than expected and unprecedented for twenty-five years in the European Union.
In the euro area, inflation in December reached 5% compared to December 2020, “Its highest level since the start of monetary union”, notice Handelsblatt, whereas “Economists expected a slight decline” compared to the increase in November, which reached 4.9%. Compared with November 2021, the increase is 0.4%.
The annual inflation rate in Europe “Unexpectedly accelerated in December […] according to preliminary Eurostat data released on Friday ” January 7, confirms Politico.
“Under the impact of soaring energy and food prices, annual price growth in the euro area – measured by the Harmonized Consumer Price Index – has exceeded the expectations of economists polled by Archyde.com , who had forecast an average increase of 4.7% ”, detail it Financial Times.
Energy has been the driving force behind this development, “Even if its prices increased a little less strongly at the end of the year (26 %) than in November (27.5 %)”, relief Handelsblatt.
In fact, excluding energy and food, two very volatile components, inflation reached 2.7% in December (with 2.4% for services and 2.9% for industrial goods excluding energy). Food, alcohol and tobacco cost 3.2% more than in December 2020.
Pressure on the European Central Bank
How to interpret this surprise outbreak? For the Financial Times, this rebound “Raises doubts as to how quickly price pressures will ease this year”. Even if “Most economists expect inflation to start falling at
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