By KELVIN CHAN, AP Business Writer
LONDON (AP) — Eurozone inflation hit a file 8.1% in May amid surging power and meals prices fueled partly by Russia’s warfare in Ukraine.
Annual inflation within the 19 nations that use the euro foreign money soared previous the earlier file of seven.4% reached in March and April, in line with the latest numbers printed Tuesday by the European Union statistics company, Eurostat.
Inflation within the eurozone is now at its highest stage since recordkeeping for the euro started in 1997.
Soaring costs are weighing on family funds and making it extra pressing for officers to behave shortly to move off additional will increase in the price of residing.
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Energy costs jumped 39.2%, highlighting how the warfare and the accompanying international power crunch are making life dearer for the eurozone’s 343 million folks.
“Energy inflation is more likely to stay increased for longer than beforehand anticipated,” after the European Union agreed to embargo most Russian oil imports by the 12 months’s finish, stated Andrew Kenningham, chief European economist at Capital Economics.
Brent crude oil, the worldwide normal, rose to $120 a barrel after the settlement. Aimed at punishing Moscow for its warfare with Ukraine, the deal is a double-edged sword that might additionally enlarge the ache for folks and companies already struggling to deal with increased power prices.
Oil and pure fuel costs had already spiked over fears the warfare would interrupt provides from Russia, the world’s largest oil exporter. Strong international demand following the COVID-19 pandemic and a cautious method to growing manufacturing from oil cartel OPEC have lifted power costs.
Countries neighboring Russia which have been weaning themselves off Russian fuel had been among the many hardest hit. Estonia’s inflation fee reached 20% whereas in Lithuania it was 18.5% and in Latvia it got here to 16.4%.
Food, alcohol and tobacco costs rose 7.5% in May , Eurostat stated — one other signal of how Russia’s warfare in Ukraine, a significant international provider of wheat and different agricultural commodities, is pushing up costs world wide. Prices for items like clothes, home equipment, vehicles, computer systems and books rose 4.2%. Prices for providers elevated 3.5%.
Inflation can also be an issue in different superior economies like Britain and the U.S., the place it is on the highest stage in 4 many years.
In Poland, which does not use the euro, annual inflation in May jumped to a 24-year excessive of 13.9%, the state statistical workplace stated Tuesday. Higher gasoline and meals costs had been the principle drivers amid an financial increase prompted by the massive inflow of Ukrainian refugees contributing to client demand.
The latest figures add strain on eurozone officers to boost rates of interest from ultralow ranges to rein within the rising costs, although that dangers stifling financial restoration. The European Union earlier this month slashed its financial progress forecast for the 27-nation bloc amid the prospect of a drawn-out Russian-Ukraine warfare and prolonged disruptions to power provides.
The president of the European Central Bank, Christine Lagarde, final week gave the clearest signal but that charges will begin rising quickly, writing on a weblog that she expects to “exit unfavorable rates of interest by the tip of the third quarter.”
The eurozone nations are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain.
AP reporter Monika Scislowska in Warsaw, Poland, contributed to this report.
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