Eurozone inflation spikes to 7% amid higher energy, non-industrial goods prices

May 2 (UPI) -- Eurozone inflation spiked in April to 7%, reversing five straight months of declines as price rises of energy and non-energy industrial goods began to pick up pace again, the European Union said Tuesday.

Food, alcohol and tobacco were expected to be the largest factor in the 0.1% rise in inflation despite the speed at which food prices were rising slowing to 13.6% from 15.5% in March, followed by energy inflation which rebounded to 2.5% after prices fell by 0.9% in March, flash estimates from Eurostat, the EU's main statistics agency, show.


Inflation in the 20 EU countries that use the euro had been falling month-by-month since peaking at 10.6% in October but, even with April's rise, it still remains 0.4% below where it was a year ago when Russia's invasion of Ukraine caused inflation to surge around the world.

Inflation rose in three of the bloc's big four economies with only Germany managing control it, shaving off 0.2% to bring it down to 7.6%. By contrast, inflation in Italy surged to 8.8%, up from 8.1% in March, while France's rate rose from 6.7% to 6.9%. Spain's inflation rate climbed from 3.1% to 3.8%.


Inflation in the Netherlands saw a sharp rise of 1.4% to 5.9%, but Belgium, Estonia, Greece and Portugal all achieved substantial reductions.

The inflation numbers come as the latest quarterly GDP figures for the zone out Friday showed the economy flatlined in the January to March period, with GDP growing by just 0.1%.

Sluggishness in Germany's economy, the bloc's largest, dragged on the other major economies all of which rebounded into the black from the October to December quarter, according to the preliminary figures, also from Eurostat.

The economy of the European Union as a whole did slightly better growing by 0.3%.

The ECB will have to factor in the two sets of figures Thursday when its rate-setting governing council meets but with inflation remaining stubbornly high a hike from the zone's current 3.5% level is likely.

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