March inflation in Europe up 3.6%
European inflation accelerated more than initially estimated in March as energy prices increased and the cost of foods including rice and dairy products rose at a record pace.
The inflation rate rose to near a 16-year high of 3.6 percent from 3.3 percent in February, exceeding an initial estimate of 3.5 percent published on March 31, the European Union's statistics office in Luxembourg said yesterday.
Accelerating inflation is fueling demands for bigger wage increases across the euro area and reinforcing the European Central Bank's resistance to cutting interest rates even as economic growth cools. ECB Executive Board member Juergen Stark on Tuesday said rates may not be high enough to contain inflation, while Greek member Nicholas Garganas said price pressure "is more intense than previously foreseen".
"The ECB is still talking tough," said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin. "Unchanged rates of 4 percent for the remainder of the year cannot entirely be ruled out especially if inflationary pressures remain elevated."
Food-price inflation accelerated to 6.2 percent in March from 5.8 percent in February, the highest since Eurostat began the current series in 1997. Rice climbed to a record $22.67 per 100 pounds yesterday on rising demand and as floods delayed planting in the US Wheat, corn and soybean also have risen to records this year on lower global stockpiles and increased demand.
Energy-price inflation accelerated to 11.2 percent from 10.4 percent, the highest since May 2006.
Agencies
(China Daily 04/17/2008 page16)
