European inflation soars to record 7.5%

Inflation in Europe soared to another record, according to new EU figures released Friday, in a fresh sign that rising energy prices fuelled by Russia’s war in Ukraine are squeezing consumers and adding pressure on the central bank to raise interest rates.

Consumer prices in the 19 countries that use the euro currency rose by an annual rate of 7.5 per cent in March, according to the European Union statistics agency, Eurostat. The latest reading smashed the high set just last month, when it hit 5.9 per cent. It’s the fifth straight month that inflation in the eurozone has set a record, bringing it to the highest level since record-keeping for the euro began in 1997.

Rising consumer prices are a growing problem around the world, making it more difficult for people to afford everything from groceries to their utility bills. Spiking energy costs are the main factor driving inflation in Europe, with those prices surging 44.7 per cent last month, up from 32 per cent in February, Eurostat said.

Oil and gas prices had already been rising because of increasing demand from economies recovering from the depths of the COVID-19 pandemic. They jumped higher after Russia, a major oil and gas producer, invaded Ukraine, on fears that sanctions and export restrictions could crimp supplies.

It’s also getting more expensive to eat in Europe. Food costs, including alcohol and tobacco, rose 5 per cent, compared with 4.2 per cent in the prior month.

Mina Agib, who runs an Egyptian restaurant called Meya Meya in Berlin, said prices for frying oil and meat have shot up by 70 to 100 per cent recently.