Inflation in the eurozone has risen to its highest level since the introduction of the single currency, more than doubling the European Central Bank's 2 per cent target, EU statistics agency Eurostat was quoted as saying by Politico.
Annual inflation in the euro area is expected to reach 4.9% in November, compared with 4.1% in October, according to a quick estimate by Eurostat. This is well above what most analysts expected.
The main driver of the jump is energy prices, which rose by 27 percent. The ECB argues that the high inflationary pressures are largely due to temporary factors and should start declining as early as next month before falling below the central bank's target again in the coming years.
ECB President Christine Lagarde argues that the long delay in the entry into force of monetary policy means that tightening monetary policy would now do more harm than good. "We will cause unemployment and high adjustment costs, and yet we would not oppose the current high level of inflation," she said in a recent interview with the Frankfurter Allgemeine Zeitung. "I would find that wrong."
What many economists are increasingly concerned about is core inflation, which rules out variables such as food and energy prices. It jumped to 2.6 percent from 2 percent, suggesting that inflation may actually fall more slowly.
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