Home Bitcoin101 European Producer Price Inflation Hits Record High 36.8%

European Producer Price Inflation Hits Record High 36.8%

by Valhalla Team

Euro zone producer prices surged more than expected in March as energy prices more than doubled year-on-year, data showed today. Eurostat, the European Union’s statistics office revealed prices at factory gates within the eurozone jumped 5.3% month-on-month for a 36.8% year-on-year surge.

With this in increase that has never been recorded before, inflation levels continue to soar in Europe placing increased pressure on the European Central Bank to raise interest rates. Annual inflation hit 7.5% in April setting a record all-time high.

An emergency rate hike overnight is badly needed. Consumer prices rose 7.5% on year in April, matching estimate. Policy makers are mulling end to QE, rate hike in the summer https://t.co/vlS6NOOqTS via @markets — Thorsten Polleit (@ThorstenPolleit) April 29, 2022

The effects of such a possible emergency rate hike are discussed by economists around the world as it could introduce a time of economic cleansing and usher into recession.

Energy crisis cuts supply

Bloomberg quoted European Central Bank Vice President Luis de Guindos as saying, “Price increases will most likely remain high over the coming months, mainly because of the sharp rise in energy costs.” According to Eurostat , energy reached a 38% increase. Western European response to Russia’s involvement in Ukraine is resulting in instability in the energy markets.

Fear continues to rise with natural gas being cut off to Bulgaria and Poland. Fuel shortages combined with unpredictable food supply and continued pandemic recovery raise uncertainty in the euro region.

The Netherlands inflation numbers appear particularly alarming at 11.2% ; however, this is partly a result of how the Dutch utility data is calculated.

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