EU stagflation fears

THE eurozone is facing a nasty bout of stagflation as the economy slows and prices soar.

official figures showed that output across the single currency bloc rose just 0.2pc in the first quarter, as inflation hit a record high of 7.5pc.

Charlotte de Montpellier, senior economist at ING, said: ‘The risk of stagflation is becoming more concrete every day.’

output fell by 0.2pc in italy – bringing the country to the brink of recession – while France stagnated.

With the US economy contracting in the first quarter and inflation there at a 40year high, Neil Wilson, the chief market analyst at Markets, said: ‘Stagflation is here for real.’