Inflation in the eurozone is rising in March after fuel prices soared as a result of the war in the Middle East. Inflation in the countries that use the euro as their currency is expected to reach 2.5 percent in March. In February, inflation was 1.9 percent. This is according to an estimate from the EU's statistics agency Eurostat.
The figures show that energy prices in particular have risen. The annual increase in energy prices in March is estimated at 4.9 percent. Søren Kristensen, chief economist at AL Sydbank, points out that the blockade of the Strait of Hormuz as a result of Israel and the US's attack on Iran has caused oil and gas prices to rise sharply.
If you exclude energy prices from the price development, inflation has actually fallen slightly. This is also called core inflation. But sharp increases in energy prices risk spreading to other product groups, as production also becomes more expensive.
To stem higher inflation, Søren Kristensen expects the European Central Bank (ECB) to raise interest rates in the near future.
- Higher interest rates and higher prices are of course not good news for either consumers or companies, and that is why we are currently seeing how the prospects for the European economy are gradually deteriorating from day to day, he writes in a comment.
However, it will be crucial for the development of inflation how long the Strait of Hormuz will remain closed, Søren Kristensen believes.
/ritzau/
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