Annual inflation for the euro area is estimated to have hit 1.9% in February, according to new data, up from 1.7% in January as it inches closer to the bloc’s target 2% mark.
A flash estimate released on Tuesday by Eurostat shows services is expected to have the highest annual rate in February (3.4%, compared with 3.2% in January), followed by food, alcohol & tobacco (2.6%, stable compared with January), non-energy industrial goods (0.7%, compared with 0.4% in January) and energy (down 3.2%, compared with a decrease of 4% in January).
The fresh data comes as concerns percolate about potential inflationary effects from rising energy prices. Conflict between Iran and the US has prompted a spike in oil and gas prices over the past few days, with brent crude futures (BZ=F) up 15.4% over the past five sessions and West Texas Intermediate futures (CL=F) 14.1% higher since last Tuesday.
Energy prices have been a driver of inflation in the last few years, with a spike in gas and oil prices also occurring due to the Russian invasion of Ukraine in February 2022.
The data released on Tuesday showed the annual rate of inflation was highest in Slovakia, at 4% and the lowest in Cyprus at 0.9%. Annual inflation in Germany for February, the eurozone’s biggest economy, was estimated to have hit 2% in February.
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Last week, official figures showed eurozone inflation fell to a 16-month low in January. It came amid a larger fall in energy prices, as well as a slowdown in processed food and services inflation.
The annual change in the eurozone consumer price index came in at 1.7% last month, down from 2% in December and in line with the preliminary estimate released three weeks ago. A year earlier, the rate was 2.5%, according to Eurostat.
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