European Inflation Rose Thanks to Energy Price Increase

Europe appears to have seen off the deflation bugbear that has stalked it for the past couple of years.

Consumer prices across the 19 countries that use the euro grew in December at their fastest rate since Sept. 2013, official figures showed Wednesday.

A surge in oil prices contributed most to the near-doubling in the annual inflation rate to 1.1 percent from the previous month’s 0.6 percent.

Though higher inflation can eat into consumer spending, it can also help push up wages and stimulate economic activity in a region that has largely stagnated.

As such, the figures are likely to provide some relief to policymakers at the European Central Bank who have resorted to a raft of stimulus programs to get inflation back toward their target of just below 2 percent, considered most suitable for a healthy economy.

With the inflation rate still short of that target, the central bank is unlikely to give up on stimulus anytime soon.

via Mainichi

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