The inflation rate in Europe hit a record 5% in December

Inflation in Europe hit a record high of 5% in December, increasing pressure on the European Central Bank (ECB) to start raising interest rates.

Preliminary data showed that the headline inflation rate stood at 5% for the last month of 2021 compared to December 2021. The figure represents the highest on record and follows the previous record of 4.9% of November.

The rise in inflation in December was mainly due to higher energy prices.

Inflation has been in the spotlight after consecutive increases in recent months, with fund managers questioning whether the ECB should take a more aggressive stance to tackle rising consumer prices.

The central bank announced last month that it would cut back on its monthly asset purchases, but pledged to continue its all-time high level of stimulus in 2022. Its forecast, updated in December, puts headline inflation at 1.8% in 2023 and 2024. She expects the rate to exceed the bank’s target in 2022, however settling at 3.2%.

Economists argue that the pandemic and inflation are among the biggest risks to economic performance in 2022 and call on the ECB to start raising interest rates.

The euro was up 0.2% against the US dollar in European trading today (Jan. 7) to around $ 1.131.

Mary I. Bruner