Eurozone Inflation Surges to New High as Energy Sanctions Loom
June 2, 2022
Inflation in the eurozone accelerated to a new record in May, and consumers could see prices climb higher as the EU adopts further sanctions against Russian energy.
Consumer prices were 8.1% higher in May than a year prior, a sharp acceleration from the 7.4% annual increase recorded in both April and March.
May’s inflation reading is the highest since records for the economic bloc began in 1997. Germany, the eurozone’s largest member, saw the fastest inflation since 1973.
The data comes hot on the heels of the EU adopting a partial ban on Russian oil, which is likely to send energy prices–the primary reason for surging inflation–even higher.
Energy prices were 39.2% higher in May than a year prior, but inflationary pressure has been widespread, with food prices also rising at a faster pace than in previous months, as did prices of manufactured goods and services.
With inflation continuing to surge, the European Central Bank has said it will begin raising interest rates once its bond-buying program ends in July, bringing its key interest rate to zero from its current level of -0.5% by September.