FRANKFURT – Eurozone inflation rose to a new record high of 8.1 percent in May from 7.4 percent in April, further aggravating the cost-of-living-crisis across the continent, preliminary Eurostat data showed Tuesday.
Inflation once again exceeded the 7.7 percent median forecast and is set to spark fresh calls for the European Central Bank to act more aggressively to rein in price pressures. Inflation is now running at more than four times the ECB’s 2 percent target.
The spike was primarily driven by a sharp increase in energy prices (39.2 percent, compared with 37.5 percent in April), followed by food, alcohol and tobacco (7.5 percent, compared with 6.3 percent in April) — components that have been pushed up further because of Russia’s war on Ukraine.
Core inflation — which excludes volatile components such as food, energy, alcohol and tobacco — strengthened considerably to 3.8 percent in May from 3.5 percent in April. Core inflation is watched closely as a key indicator for domestic price pressures and as a signal that external price shocks are becoming entrenched.
Inflation pressures varied significantly across the region. The Baltics suffered the most, with inflation hitting 20.1 percent in Estonia; 18.5 percent in Lithuania; and 16.4 percent in Latvia. The lowest rates were recorded in Malta, at 5.6 percent, and France, at 5.8 percent.