Price growth in the 17 countries that share the euro accelerated at the end of the first quarter to the fastest monthly rate on record, moving inflation up to a fresh 29-month high, according to The Wall Street Journal. On Friday, the European Union reported that prices rose by 1.4% in March, up from the a 0.4% increase the previous month and marking the largest monthly increase on record. The monthly jump brought the annual rate of inflation up to 2.7% in the year to March from 2.4% previously, which is the highest level since October 2008.
The EU report also showed that core inflation accelerated, moving up to a 1.3% annual rate of price growth in March from a 1% increase in the year to February, which is the greatest yearly jump since August 2009. Core inflation also rose by a record 1.4% on the month. The increasing inflationary pressure pushed the overall inflation index further above the 2% target ceiling set by the European Central Bank, and Marc Ostwald of Monument Securities said that a second interest rate increase by the ECB looks “pretty much inevitable” by the time policymakers meet in June.
