Confirmation inflation is making a comeback came with the latest figures for the 15 Eurozone countries today, with an average figure of three point six percent nearly double the target set by the European Central Bank.
Spiralling food and oil prices are mainly to blame, taking inflation to a 16 year high and returning it to a record level, after dipping in April. At the back of the class were Spain and Belgium, the latter’s inflation the worst for 23 years.
It all adds up to more bad news for hard-pressed Belgian shoppers;
“Salaries are frozen and not rising at all, but everything’s doubled or tripled, or raised by 30 or 40 percent. Meat, pasta, bread, all the staple products for feeding a family have gone up. We’re very worried, the population’s on edge”, said one woman.
Growth is flagging too, but in such a climate the ECB cuts interest rates at its peril, and these inflation figures mean that is now unlikely this year.
An ECB council member says the oil, food and raw material price shocks may be the most worrying ever faced by the bank, but that was no reason for it to shed its core anti-inflation role.