Eurozone: Inflation rate rises in April - solid growth

Inflation in the Eurozone remains high. With yesterday's publication of the German inflation rate, it was already clear that a decline in the inflation rate for the common currency area is off the table. Although energy prices have fallen, food prices have risen recently. In addition, the upward trend in prices gained in breadth. This is impressively shown by the core inflation rate, which now stands at 3.5%. Higher energy prices are being passed on to products by industry and service providers. Inflation ignited the next stage: price overruns are occurring.

It was a difficult quarter for the Eurozone. The Italian economy was even in reverse gear. There, the economy shrank by 0.2%. The French economy was also unable to move forward and stagnated. Germany's GDP growth, on the other hand, stood out positively with a slight increase of 0.2%. The fact that GDP grew at all was thanks to the Corona easing and a better supply of materials in industry. In most countries of the Eurozone, industrial production increased in the first months of the year. Supply chain problems also improved enough to put strong GDP growth on the agenda. The only mild growth was therefore once again an expression of a difficult economic situation due to a lack of raw materials and intermediate products.

For the ECB, today's figures are a clear call to action. It cannot be mentioned often enough, but the ECB must realise the seriousness of the situation. Until a few months ago, the European monetary guardians' reasoning was still coherent. Inflation was mainly due to Corona effects. But things changed. With the outbreak of war, inflationary pressures have intensified and gained breadth. An interest rate hike in July is therefore a must. We hope that the monetary authorities will fulfil this duty.