Eurozone inflation hits new 3.5% peak - by Gary Duncan
Inflation in the eurozone soared to record highs this month, dealing another severe blow to hopes for an early cut in interest rates to underpin growth in the 15-nation bloc. The latest leap in price pressures, believed to have been driven by the surging world cost of food and energy, drove the headline measure of eurozone consumer price inflation to a new peak of 3.5 per cent in March, up from 3.3 per cent in February, according to an early “flash” estimate. With inflation stuck firmly above the European Central Bank’s target of “close to, but under 2 per cent”, the news further sharpened its dilemma over how to respond to increased risks to eurozone prospects. It sparked renewed warnings from economists that any rate cuts from the ECB remained some way off.
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