Eurozone inflation surges to 4 percent

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Inflation in the 15-member eurozone surged to a record 4 percent in June, according to preliminary estimates published Monday by Eurostat.

1 July 2008

BRUSSELS - Inflation in the 15-member eurozone surged to a record 4 percent in June, according to preliminary estimates published Monday by Eurostat, the European Union's statistical office.

The figure is the highest since the consumer price index for Europe's single currency area was created and double the 2 percent annual inflation target set by the European Central Bank, adding pressure on its board to hike interest rates at its next meeting in Frankfurt on Thursday.

"Current inflation levels are uncomfortably high," said Amelia Torres, the spokeswoman of EU Economic and Monetary Affairs Commissioner Joaquin Almunia.

"What is important is to ensure (that) those inflationary expectations do not become entrenched and to avoid at all cost a wage-price spiral which would have very damaging consequences for our economies and for citizens in general," Torres added.

Eurostat was forced to revise up its May estimate to 3.7 percent on the back of spiralling energy and food prices.

Torres said she expected rising food and oil prices to have also played a significant role in pushing up the June figure.

Eurostat is due to publish final and detailed inflation figures for June on 16 July.

The 15 EU countries that share the euro are Belgium, Germany, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia and Finland. Slovakia is due to join the club on 1 January.

[dps / Expatica]

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