Euro zone inflation surged to 7.5% in March, hitting another record high with months still left before it is set to peak
Consumer price growth in the 19 countries sharing the euro accelerated from 5.9% in February, Eurostat said on Friday, far beyond the 6.6% expected, as war in Ukraine and sanctions on Russia pushed fuel and natural gas prices to record highs.
The central bank governors of Austria and the Netherlands have already called for rate hikes this year, worried that rapid price growth is becoming broad-based, an argument supported by underlying data from Friday's release. ECB Chief Economist Philip Lane acknowledged that inflation is very high but said there were opposing forces at work and the euro zone central bank should take its time analysing the data.
High energy prices are traditionally a drag on growth and will thus actually weigh on inflation once the immediate spike passes, raising the risk that price growth will later fall back below target.
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