Euro zone inflation hits record-high 5%

There's no relief in sight for European consumers.

New data Friday (January 7) showed inflation hitting a fresh record high.

Price rises jumped to 5% in December.

That surprised economists, who had predicted a more modest gain.

Energy costs were once again the big driver, up 26% on the year.

They've been driven higher amid soaring prices for natural gas around the world.

But that's far from the only concern for euro zone households.

Prices for food, services and imported goods also rose far faster than the European Central Bank's 2% target.

Some temporary factors came into play there, including a splurge in spending by people who saved cash during lockdowns.

Now views differ on how fast inflation will come back down.

The ECB thinks it will be back below 2% by the end of the year.

But many influential policymakers think high inflation rates will persist well into 2023.

For now though, the central bank isn't expected to take any action.

The ECB moved to curb its stimulus spending only a few weeks ago, and no big policy shift is now seen likely before March.

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