Eurozone inflation for the month of March surged to 2.7%, year-over-year, from 2.4% year-over-year in February, according to Eurostat. That’s higher than the original 2.6% reading. In the euro area, on Ireland remains below the 2.0% target rate set by the ECB, at 1.2% year-over-year inflation.
The broader inflation number for the European Union was at 3.1% for March. That number was bolstered by an 8.0% inflation rate in Romania, and a 4.6% rate in both Hungary and Bulgaria.
The ECB’s tightening measures only began last week, so they’re likely to show up in some way in the next reading, if they are having any effect. The region is still reeling from higher oil prices due to Middle East instability. Increasing taxes on certain goods is also having an impact, and housing prices are rising too.
From the release:
The main components with the highest annual rates in March 2011 were transport (5.6%), housing (5.1%) and alcohol & tobacco (3.6%), while the lowest annual rates were observed for communications (-0.6%), recreation & culture (-0.3%) and household equipment (0.9%). Concerning the detailed sub-indices, fuels for transport (+0.60 percentage points), heating oil (+0.24), electricity and gas (+0.10 each) had the largest upward impacts on the headline rate, while telecommunications (-0.11), rents and cars (-0.09 each) had the biggest downward impacts.
It remains uncertain whether ECB President Jean-Claude Trichet will push for further tightening next month, though it seems likely policy makers will wait to see the impact of their decisions.