Consumer prices in Europe hit a record level of 8.1% in May, the seventh consecutive month in
which inflation has reached new all-time highs.
According to preliminary figures from Europe’s statistics agency, inflation across the Euro zone
came in at 8.1% in May, up from April’s record high of 7.4% and higher than economists’
expectations for a 7.8% rise in year-over-year consumer prices.
Several major European economies surprised to the upside. German inflation came in at an
annual 8.7% in May, significantly outpacing analyst expectations of 8% and marking a sharp
increase from 7.8% in April.
French inflation also surpassed expectations in May to reach a record 5.8%, up from 5.4% in
April, while Spanish consumer prices jumped by an annual 8.5% in May, exceeding economist
forecasts for 8.1% annualized growth.
Across the euro zone, the record annual consumer price increases have been driven by soaring
energy costs, which hit 39.2% (up from 37.5% in April) and a 7.5% rise in prices for food,
alcohol and tobacco products (up from 6.3% in April).
Even without volatile energy and food prices, inflation in Europe increased from 3.5% in April to
3.8% in May, according to the Eurostat statistics agency.
Rising prices have been exacerbated in recent months by the war in Ukraine, particularly food
and energy costs, as exports are blocked, and countries scramble to reduce their reliance on
Russian oil and natural gas.
European leaders have agreed to ban 90% of Russian crude oil by the end of this year, sending
prices for Brent crude oil, the international standard, above $120 U.S. a barrel.
Earlier this month, European Central Bank President Christine Lagarde said she was
anticipating an interest rate increase at the central bank’s next meeting in July. The European
Central Bank’s governing council is scheduled to meet on June 9, and then again on July 21.
