Euro zone consumer prices rose faster than expected in February as higher fuel prices drove the inflation rate to an 11-month high of 2.4 per cent, the European Union statistics office Eurostat said today.
It was the seventh month running that inflation had topped the European Central Bank's self-set 2 per cent ceiling. The bank faces growing calls to consider interest rate cuts if confidence is hurt by conflict in the Gulf.
The annual inflation rate was higher than Eurostat's initial estimate of 2.3 per cent, which economists had expected to be confirmed - and also above January's 2.2 per cent.
Consumer prices rose by a larger-than-expected 0.4 per cent on a monthly basis. "Energy prices are having a big upwards impact on inflation and had a very significant impact this month," a Eurostat official told reporters.
Energy prices rose by 1.8 per cent from the previous month and by 7.6 per cent from a year earlier - their biggest annual rise since May 2001, according to an official from Eurostat.
Prices of motor and home heating fuel, a component of overall energy costs, rose at their fastest pace since November 2000, he said.
The chairwoman of the European Parliament's Economic and Monetary Affairs Committee, Ms Christa Randzio-Plath, said the increase in the euro's value on the foreign exchanges should offset the higher price of oil, which is denominated in dollars.
"It would be most unfortunate if oil companies, especially at this difficult time for the European economy, only adjusted their prices to changes in the oil market, without passing on the changes in the currency markets," she said.