The inflation rate in the euro countries has risen to 5.1 percent – which surprises experts. The main reason is the energy costs. In many EU countries, inflation is even higher than in Germany. Inflation in the euro area has reached an all-time high. According to the statistics office Eurostat, consumer prices in January were 5.1 percent higher than in the same month last year. The increase comes as a surprise, because observers had expected a drop to 4.4 percent. In December, the inflation rate was still 5.0 percent.

Energy remains the biggest price driverPrice drivers number one are still high energy costs. Electricity, gas, heating oil or petrol were on average 28.6 percent more expensive than in January 2021. However, many sectors of the economy are also suffering from supply bottlenecks. Basic materials are becoming more expensive, which is then noticeable for the end consumer at the checkout. Consumers had to spend 3.6 percent more on processed food, tobacco products and alcohol than a year ago, and 2.4 percent on services. In Germany, the price increase has currently fallen slightly and at 4.9 percent is now below the European average . The statisticians registered the highest inflation rates in Estonia and Lithuania at around twelve percent, in Belgium and Slovakia it is 8.5 percent. In Finland, Portugal and France, on the other hand, the cost of living is rising comparatively slowly.

The pressure on the ECB is increasing The current values are significantly higher than the inflation rate of two percent that the European Central Bank (ECB) is actually aiming for. Critics accuse the ECB of further fueling the price increase with its loose monetary policy and the billions in bond purchases. The increase again significantly increases the pressure on the European central bankers to raise interest rates. The Governing Council meets tomorrow. So far, however, the motto has been: higher interest rates next year at the earliest, otherwise the European economy could be slowed down in its recovery from the corona shock.

Bankers and economists agreeIn contrast, the President of the German Savings Banks and Giro Association, Helmut Schleweis, is in favor of an early interest rate hike. If the ECB reacts too late or not at all and inflation remains high, there is a risk of a dangerous wage-price spiral, according to Schleweis