Euro Area: Inflation surges to new record high in April
May 2, 2022
Harmonized inflation rose to 7.5% in April, from March’s 7.4% reading, marking the highest print since 1997, when records began. Therefore, inflation moved further above the European Central Bank’s target rate of 2.0%. April’s result was due to faster increases in prices for food, alcohol and tobacco, non-energy industrial goods, and services. On the flip side, prices for energy rose at a slower pace.
On a monthly basis, harmonized consumer prices rose 0.6% in April, below March’s 2.5% increase which had marked the fastest increase on record. Core inflation, which excludes volatile energy and unprocessed foods prices, jumped to 3.9% in April from March’s 3.2%, also marking the highest print since records began.
Commenting on the release, Bert Colijn, senior economist at ING, noted:
“With supply chain problems set to last longer and become more severe again due to Chinese lockdowns and the war, expect core inflation to trend higher for most of 2022 at least. This broadening of high inflation is a key concern for the ECB and adds to pressure to act quickly, despite the fact that this inflation continues to be rooted in supply-side issues beyond the control of the central bank.”