The European Union’s statistics office Eurostat said that the Euro zone inflation accelerated as expected in April. This is because of a sharp rise in the costs of energy and services.
The consumer prices in the 19 countries sharing the euro rose 0.6% month-on-month for a 1.6% year-on-year increase, up from 1.3% year-on-year in March said Eurostat. Over the medium term the European Central Bank wants to see inflation even closer to 2%. But it has warned that the faster growth is mainly due to comparison effects with very low energy prices a year earlier.
Prices of energy, such as oil and gas, rose 10.4 year-on-year in April. This adds 0.96 percentage point to the final inflation figure. On the other hand, costs of unprocessed food, another volatile component, fell 0.3% year-on-year in April. Prices went up 0.5% in the month and 0.8% from a year earlier, without these two sharply changing factors, or what the ECB calls core inflation. This is slowing from the 1.0% annual growth in March.
But prices of services, which account for almost two thirds of euro zone gross domestic product, went up 0.9% year-on-year in April. This adds 0.37 percentage point to the final inflation number. And thus the strong trend continues since the start of the year.