BRUSSELS: Inflation in the eurozone hit a new record high in January, official data showed on Wednesday, putting pressure on the European Central Bank (ECB) ahead of a monetary policy meeting this week.
That figure jumped to 5.1% the previous month, ever since the official Eurostat agency began compiling the data in 1997.
The European Central Bank, in charge of euro monetary policy, has a medium-term inflation target of 2%.
Its board meets on Thursday and observers expect the ECB to hold on to its current rates, which are historically low in the wake of the coronavirus pandemic, despite inflationary pressures.
Any tightening could threaten economic recovery, and weigh on indebted companies and governments.
"Inflation data for January supports our view that the ECB will soon expect inflation to remain at its target over the medium term," firm Capital Economics said in response to the latest figures.
"Accordingly, we expect policymakers to phase out net asset purchases entirely this year and prepare to start raising interest rates in early 2023, if not sooner."
ECB chief Christine Lagarde has insisted that inflationary pressures are "transient" and should ease over the course of the year. She says the sudden boom of economies from the COVID restrictions has led to a rise in energy prices.
Inflation had already hit a record five per cent in December.
rise in energy prices
Eurostat said energy accounted for 28.6% of the inflation seen in the eurozone in January. This weighting has increased since December, when it represented 25.9% of the total price jump.
The share of food, alcohol and tobacco stood at 3.6 per cent, also higher than the previous month, while services increased by 2.4 per cent.
Inflation in non-energy industrial goods rose 2.3% in January, lower than the 2.9% seen in December.
Inflation is becoming a growing concern in the eurozone, as other economies around the world face supply shortages and sudden demand for energy as businesses try to jump back into pre-pandemic mode.
The EU is also faced with other variables weighted on its energy market.
In the short term, tensions are rising over Ukraine, along with Russia – its main natural gas supplier.
In the long term, the bloc's transition toward a net carbon-zero future will require a shift from fossil fuel sources to renewable sources.