Inflation soared to a record high in Europe in November as a continued upward climb in energy costs pushed prices skyward, data showed on Tuesday.
Annual inflation in the eurozone surged to 4.9 percent, the European statistics agency Eurostat reported, the highest since records began in 1997. Excluding volatile energy and food prices, inflation jumped by 2.6 percent from a year earlier, the highest in two decades.
Prices for goods and services have been climbing steadily since summer as a reopening of the global economy from coronavirus lockdowns juiced economic activity, sending energy costs up and crimping global supply chains.
Energy costs jumped 27.4 percent in November from a year ago, continuing an upward trend.
“We haven’t seen inflation this high since the eighties,” Bert Colijn, senior economist for the eurozone at ING Bank, said in a note to clients. “The energy shock of 2021 is starting to have a substantial impact on consumers,” he added.
The inflation gains have driven up costs for a range of products and services, and have led workers and unions to demand higher wages in many European countries.
Germany, Europe’s largest economy, reported that inflation accelerated to 6 percent from a year ago, while in France it rose to 3.4 percent, the highest in over a decade. The highest rates were in Belgium, where inflation rose to 7.1 percent, and in Lithuania, where it topped 9 percent.
With the rapid circulation of the recently discovered Omicron variant of the coronavirus, the global economic outlook has suddenly grown more uncertain.
The European Central Bank has said that it expects the inflation spike to be temporary as energy price increases fade next year. The bank’s mandate is to keep inflation to a 2 percent target.
“Although the ECB has stated that it sees the current price pressures easing in 2022, and our baseline is that monetary policy will remain accommodative, the latest data will add to the debate on the appropriate level of policy support,” Katharina Koenz, an economist at Oxford Economics, said in a note to clients.
“However,” she added, “there isn’t much the ECB can do about higher energy prices and supply bottlenecks in the short-term anyway.”