Inflation in Europe jumps in March

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Eurostat move to revise March inflation rate to 3.6 percent in due of rising food and energy prices.

17 April 2008

BERLIN - Inflation in Europe jumped in March, data released Wednesday showed, with March's consumer prices revised up to 3.6 percent, and as result reducing the prospects of the European Central Bank (ECB) delivering an early rate cut.

The move by the European Union (EU) statistics office, Eurostat, to revise up the March inflation rate for the 15-member eurozone came in the wake of rising food and energy prices and followed its earlier estimate of a 3.5 percent annual rate.

Inflation stood at 3.3 per cent in February.

Either way, inflation remains well above the 2-per cent annual target set by the ECB, which has resolved to sit tight on interest rates in the face of resurgent inflationary pressures across the currency bloc.

Annual inflation in the broader-based 27-member EU came in 3.8 percent in March, up from 3.5 percent in February partly as a result of a sharp jump in consumer prices in several of the Brussels-based bloc's new Central European members.

While inflation in the two Baltic states of Latvia and Lithuania hit 16.6 percent and 11.4 percent respectively, annual consumer prices ion Bulgaria climbed to 13.2 percent last month compared to 12.2 percent in February.

March inflation also edged up in Slovakia, which hopes to be the next new EU member state to sign up to the euro in January next year.

The March figure was also the last data included in Slovakia's inflation assessment before the European Commission and the European Central Bank rule in the coming weeks on the country's application to join the eurozone.

Annual inflation in Slovakia came in at 3.6 percent in March up from 3.4 percent in February. As a consequence, this beat analysts' forecast of 3.5 percent rate in March.

However, analysts said the increase did not represent a threat to Slovakia's hopes of meeting nominal Maastricht inflation criterion as the key 12-month average increased only modestly to 2.2 percent from 2.1 percent in February.

This means that inflation in Slovakia is likely to remain comfortably under the strict reference rate of possibly just over 3 percent for nations seeking to join the euro.

The Netherlands and Britain recorded the lowest annual March inflation rates in Europe of 1.9 percent and 2.5 percent respectively, the Eurostat data showed.

[dpa / Expatica]

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