Brussels, 17/05/2001 (Agence Europe) - Inflation in the Euro zone rose from 2.6% to 2.9% in April, announced Eurostat, the European statistical office, on Wednesday. This significant increase distances inflation from the ceiling set at 2% by the European Central Bank (ECB), which finds itself in a contradictory position in relation to its decision, taken last week, to lower its intervention rate. It is generalised throughout the European Union, whose rate indicated 2.6% (against 2.3% in March). Last year, inflation in the Euro zone was 1.9% and 1.7% in the EU. Consumer prices rose 0.5% in the Euro zone in April. The energy price index experienced a significant rise to 7.8%, a level equal to that of January, while it fell to 5.6% in March.
Without great surprise, Gerassimos Thomas, spokesperson for Commissioner Pedro Solbes, felt that the figures remain in line with the European Commission forecasts, even if it considers this rise unwelcome. He drew attention to the fact that underlying inflation (consumer prices excluding energy and food) has not experienced the same pressure (1.9% in April against 1.8% in March).
The highest annual rates have been seen in the Netherlands (5.3%), Portugal (4.6%) and in Ireland (4.3%). The first two, with Sweden, also experience more pronounced rises. The lowest rates where in the United Kingdom (1.1%), in France (2%) and in Austria (2.5%). The only falls where seen in Luxembourg (from 3.2% to 2.7%) and in Denmark (from 2.9% to 2.6%). The only external index presently available is that for Switzerland which rose from 1 to 1.2%.
Last week, the ECB created a surprise by deciding to reduce its main intervention rate from 4.75% to 4.5%, arguing for a reduction in inflationary pressure, notably due to the temporary nature of the food crises shaking the EU (see EUROPE of 11 May, p.6). It seems to have an increasingly smaller margin for manoeuvre in the face of the rise of the price indices. The United States has experienced inflation of 3.3% in April, but this remains contained, which allows the Federal Reserve to give the American economy a shot in the arm to by lowering interest rates by 50 base points to bring it to 4%.