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Annual inflation for May hits record 3.7% in eurozone

Annual inflation rates for May rose in both the 15-nation euro zone and in the 27-nation European Union, according to official figures released Monday.

The annual inflation rate in the euro zone climbed 0.3%age points from April to a record high of 3.7%, Eurostat reported. Because of rocketing oil prices, the inflation rate over 12 months reached its highest since the birth of the euro in 1999, exceeding the prediction of 3.6% made by Eurostat at the end of May. Monthly inflation stood at 0.6% in May.

“It’s not a good figure,” said European Commission Spokesperson for Economic and Monetary Affairs Amelia Torres. Inflation “remains the commission’s main concern” when it comes to the economy, she added. Europe needs to remain “extremely careful” to avoid a wage and inflation spiral, which would not be in the interest of European workers, Torres said. But at the moment the trend seemed to be up, she noted. The hike may prod the European Central Bank to raise interest rates in July, reports say.

In the EU, annual inflation hit 3.9% last month, up from3.6% in April. The rate stood at 2.1% a year earlier. Compared with April, annual inflation rose in 21 EU member states, remained stable in three countries and fell in two, the office said.

The lowest annual rate was observed in the Netherlands at 2.1%, followed by 2.8% in Portugal and 3.1% in Germany. Latvia, Bulgaria and Lithuania had the highest inflation rates, at 17.7, 14 and 12.3% respectively. (