EU warns Europe can't be complacent on oil
Europe will have to get used to high oil prices and keep a sharp eye on inflation, EU Economic and Monetary Affairs Commissioner Joaquin Almunia warned Monday. "There is no room for complacency in the domain of fighting against inflationary pressures," he said after a meeting with euro zone ministers in Luxembourg. His words echoed the European Central Bank last week which kept interest rates steady at 2 percent, stressing the need for "strong vigilance" on higher prices. Almunia delivered a mixed report on Europe's slow economic recovery saying the European Commission expected stronger growth in the second half of the year. Economic sentiment is rising, investor confidence is improving but consumers are still reluctant to spend. The jump in inflation from 2.2 percent to 2.5 percent in September suggested that oil prices are having an impact, he said. However, Europe has so far escaped the second round impact of higher energy costs, mainly wage increases. He said high oil prices meant governments should restrict handouts to soften the blow of fuel costs to people on low income.
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