Energy inflation in the Euro Area surpasses the 30% mark

Inflation in the Euro Area accelerated again in February, this time at a faster rate compared to the previous month. The consumer price index (CPI), published by Eurostat jumped by 5.8% y/y, yet another record high, following a 5.1% y/y growth in the previous month, flash estimates show. The most recent data is above the expectations of around 5.3% y/y inflation.

Core inflation, which excludes the more volatile food and energy prices, put an end to the deceleration path and increased to 2.7% y/y compared to 2.3% y/y in January. Energy inflation, which has been the main driver of the recent price increased, now surpassed the psychological level of 30% y/y to reach 31.7% y/y in February.

The consumer price index (CPI) jumped by 5.8% y/y, yet another record high

Prices of food and non-alcoholic beverages, which stayed relatively low until mid-2021, are expected to increase at a faster rate too.

Inflation has been a major concern for policy makers, businesses and households in recent months. Taking into account the invasion in Ukraine and the subsequent sanctions imposed on Russia, a key global commodities exporter, there are concerns that prices will likely keep rising.

The European Central Bank (ECB) will have its monetary policy meeting next Thursday, Marth 10th, and will publish its updated macroeconomic forecasts, including for inflation. The regulatory body is also expected to take a clear stand on the recent price developments in the currency block, as it has been refraining from any monetary policy actions, since it regards the current higher inflation as temporary phenomenon.

More visuals here.