BRUSSELS: Eurozone inflation soared in December to its highest annual rate since records began in 1997, the Eurostat agency said on Friday.

The 5 per cent figure is a first estimate but confirms a trend led by soaring energy prices, rising from 4.9 per cent in November to a quarter-century high.

These figures are well above the European Central Bank‘s target of 2.0 per cent inflation in the eurozone. But the ECB believes that this inflation is transitory and should fall in 2023, after peaking in 2022.

The surge in prices in recent months is mainly due to the exceptional rise in gas and electricity prices.

In December, the annual increase in energy prices reached 26 per cent, far ahead of the other products surveyed in Eurostat’s basket.

Food, alcohol and tobacco prices nevertheless rose by 3.2 per cent, ahead of industrial goods on 2.9 per cent and services at 2.4 per cent.

Among large countries, the highest increases were in Spain at 6.7 per cent and Germany at 5.7 per cent.

Conversely, prices remained more moderate in Italy and France, according to harmonised European data calculated by Eurostat.

Inflation was particularly high in the Baltic States, with the highest level for the euro area recorded by Estonia at 12 per cent and Lithuania with 10.7 per cent.

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