Saturday, January 15, 2011

Euro-Zone Inflation Hits 26-Month High

Wall Street Journal
January 14, 2011

The euro zone's annual rate of inflation rose above the European Central Bank's medium-term target for the first time in more than two years in December, driven by fuel, food, alcohol and tobacco prices, official data showed Friday.

The figures are likely to fuel concerns that interest rates could rise sooner than expected after ECB President Jean-Claude Trichet warned Thursday that inflation may increase in the short term but should moderate later this year.

Consumer prices rose 0.6% from November, pushing the year-to-year rate up to 2.2% from 1.9% the previous month, the highest annual rate since October 2008 when it stood at 3.2%, the European Union's Eurostat statistics agency said.

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