Eurozone inflation hits record high of 5.1% in January as energy prices skyrocket

Eurozone inflation has hit a new record high in January. A total rise of 5.1% for the first month of 2022 has put policymakers under pressure. The European Central Bank’s inflation target is just 2%.

The new data puts pressure on the ECB to raise interest rates. ECB Chief Christine Lagarde said this would only be “transitionary”.

However, rising energy costs in the Euro area is putting pressure on consumers & businesses. Other factors include the ongoing crisis with Ukraine and Russia.

As well as global supply chain problems and rising wholesale energy prices. The Federal Reserve and the Bank of England have already signalled interest rate hikes are coming.

Markets will be watching the ECB’s next policy move, and whether it too will seek to increase interest rates.