London, November 30 (BNA): Official figures showed, on Tuesday, that consumer prices in 19 countries that use the euro currency rose at a record rate as a result of the sharp rise in energy costs this year.
The European Union’s statistics agency, Eurostat, said the euro zone’s annual inflation rate reached 4.9% in November, the highest level since record keeping began in 1997 and up from 4.1% in October, the previous highest level, the Associated Press reported.
Like other countries, the eurozone, which is made up of 19 economies including France and Germany, is experiencing significant price hikes as a result of the economic recovery from the coronavirus pandemic and disruption in supply chains.
Across the eurozone, inflation is at multi-year highs, including in Germany, Europe’s largest economy, with an annual rate of 6%. Even that’s down from the 6.2% recorded at the last US census, the biggest jump in 12 months since 1990.
Eurozone core inflation, which strips out potentially volatile items such as alcohol, energy, food and tobacco, also rose in November to an annual rate of 2.6% from 2%.
Under normal circumstances, increases are likely to increase pressure on the European Central Bank to start considering the possibility of raising its key interest rate from a record low of zero. The bank was tasked with developing a policy to achieve the 2% inflation target.
However, the recently discovered omicron variant of the coronavirus has raised some uncertainty about the global economic outlook, and as a result, central banks around the world are expected to refrain from announcing any major policy changes soon. If the alternative begins to affect growth levels, prices, like oil, are likely to drift lower, easing inflation rates around the world.
Many economists believe that the rise in inflation over recent months will reverse next year as the fundamental effects associated with the sharp drop in prices during the pandemic last year, especially energy, have been excluded from annual comparisons.
The collection of records about the euro began two years before its actual launch in 1999. During the first three years of its existence, it was an invisible currency that was traded in the foreign exchange markets and used for accounting and electronic payments purposes.
In 2002, euro banknotes and coins were circulated for the first time, replacing historical currencies such as the French franc, German mark and Italian lira.
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