Euro zone monthly inflation picks up

Inflation in the 12-nation euro zone accelerated to an annual rate of 2 per cent in April from 1

Inflation in the 12-nation euro zone accelerated to an annual rate of 2 per cent in April from 1.7 per cent in March, the European Union statistics office says.

Compared with March, harmonised consumer prices in April rose by 0.4 per cent, Eurostat said today.

The rise in inflation was in line with the expectations of economists and the European Commission, which last month said it had anticipated a slight pickup following low rates in the first few months of the year.

The Commission forecasts a 1.8 per cent inflation rate for the full year.

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Compared with March, energy prices rose by 1.1 per cent in April, reflecting the rise in oil prices. European officials have voiced concern over the impact of higher oil prices but also that inflation remains in check over the long run.

The core rate of inflation, which excludes volatile energy and unprocessed food costs and is referred to by the European Central Bank, rose by 0.5 per cent in April for an annual rate of 2.1 per cent.

This is above the ECB's target of keeping inflation below, but close to 2 per cent over the medium term.

On an annual basis, the highest price rise in April was seen for alcohol and tobacco, where prices rose 8.2 percent, and for health, with prices up by 7.9 per cent. The lowest rise was seen for recreation and culture, where prices fell 0.3 per cent.

For the 25 countries in the EU, annual inflation rose to 1.9 per cent in April from 1.7 per cent in March, with prices up by 0.4 per cent during the month.

Among the EU states, the lowest annual rate was seen in Lithuania, where prices fell by 0.7 per cent, and the highest was in Slovakia at 7.8 per cent.

Within the euro zone, the annual inflation rate in Greece - which is hosting the Olympics - was the highest at 3.1 per cent, while prices in Finland declined by 0.4 per cent.