The rise in food, alcohol and tobacco prices were the main driver of inflation in the Eurozone in February, surpassing energy, according to preliminary data from Eurostat, which could suggest to the leaders of the monetary policy of the European Central Bank, ECB, continue with new interest rate hikes.
The prices of food, alcohol and tobacco were the main driver of inflation in the Eurozone in February, surpassing the energy that dominated the rises in recent months, according to preliminary data from Eurostat.
The interannual rate of food increased 15%, which is nine tenths more than that registered in January and which for the first time anticipates the increase in energy prices, which in February stood at 13.7% after falling five points, far from the peaks of last year, when it exceeded 40%.
Food does not show “signs of relief”, as highlighted by the analysis released by Oxford Economics after learning the preliminary data from Eurostat, in which they point to energy as “the only reason” that explains that the general rate of inflation in the area euro has fallen one tenth in the second month of the year, to 8.5%.
The study sees “more worrying” the upward pressure exerted by non-energy industrial goods and especially services, with interannual rates of 6.8% and 4.8%, respectively, contributing to the three-tenths increase in inflation core, from 5.3% in January to 5.6% in February.
This data “not only underpins the 50 basis point increase in interest rates in March (by the ECB), but also paves the way for similarly tightening monetary policy in the second quarter,” says the Oxford Economics analysis. .
“Keeping interest rates at restrictive levels over time will reduce inflation by cushioning demand and will also protect against the risk of a persistent upward shift in inflation expectations,” explained the president of the European Central Bank, Christine Lagarde, in his last speech before the European Parliament.
The ECB wants to break the rise in prices that largely affects the Baltic countries with rates that, although now trending downward, continue in double digits: Lithuania with 17.2%, Estonia with 17.8% and Latvia 20.1%.