LONDON — Eurozone inflation hit a record 8.1% in May amid surging energy and food costs fueled in part by Russia’s war in Ukraine.
Annual inflation in the 19 countries that use the euro currency soared past the previous record of 7.4% reached in March and April, according to the latest numbers published today by the European Union statistics agency, Eurostat.
Inflation in the eurozone is now at its highest level since recordkeeping for the euro began in 1997.
Soaring prices are weighing on household finances and making it more urgent for officials to act quickly to head off further increases in the cost of living.
Energy prices jumped 39.2%, highlighting how the war and the accompanying global energy crunch are making life more expensive for the eurozone’s 343 million people.
“Energy inflation is likely to remain higher for longer than previously expected,” after the European Union agreed to embargo most Russian oil imports by the year’s end, said Andrew Kenningham, chief European economist at Capital Economics said.
Brent crude oil, the international standard, rose to $120 a barrel after the agreement. Oil and natural gas prices had already spiked over fears the war would interrupt supplies from Russia, the world’s largest oil exporter. Strong global demand following the COVID-19 pandemic and a cautious approach to increasing production from oil cartel OPEC have lifted energy prices.
Food prices rose 7.5% in May , Eurostat said — another sign of how Russia’s war in Ukraine, a major global supplier of wheat and other agricultural commodities, is pushing up prices around the world. Prices for goods like clothing, appliances, cars, computers and books rose 4.2%. Prices for services increased 3.5%.
Inflation is also a problem in other advanced economies like Britain and the U.S., where it’s at the highest level in four decades.
The latest figures add pressure on officials to raise interest rates from ultralow levels to rein in the rising prices.
The president of the European Central Bank, Christine Lagarde, last week gave the clearest sign yet that rates will start rising soon, writing on a blog that she expects to “exit negative interest rates by the end of the third quarter.”