Brussels, 31/07/2008 (Agence Europe) - Inflation in the eurozone has hit a new record high, with consumer prices expected to rise by 4.1% in July 2008 after a 4% rise in June, according to estimates published by Eurostat on Thursday 31 July. Eurozone inflation is new more than double the target level set by the European Central Bank (ECB) of around 2%.
At the start of July 2008, the ECB decided to increase interest rates but the message of the bank's president hinted that the rise might be a one-off. If the inflation rate recorded in July turns out to be a blip, the ECB would gain some respite (see EUROPE 9696). The ECB Governing Council will be looking at interest rates next week. At its last meeting, it pointed out that it saw tackling inflation as very important and would be vigilant about second-round impacts. Jean-Claude Trichet, the ECB President, pointed out, however that the eurozone's economy was facing a more extended period of high inflation than forecast a few months ago and that inflation was not expected to start to relent
until next year. (A.B. /transl fl)