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Last Updated: Friday, 14 December 2007, 13:58 GMT
Euro inflation hits six-year high
European Parliament building in Strasbourg
Analysts say current anti-inflation policies are not effective
Higher oil and food prices have sent inflation in the eurozone to its highest level in more than six years.

The 13-nation bloc that uses the euro saw consumer prices rise 3.1% in November compared with a year earlier, up from October's 2.6% increase.

The rise exceeded forecasts and is above the European Central Bank's (ECB) 2% annual target.

The ECB has left interest rates on hold, but analysts say these figures could fuel the case to raise them.

Core inflation, which excludes energy and food prices, rose 2.3% on a yearly basis.

'Bad news'

The ECB has been reluctant to change rates, faced with the dual problems of rising inflation and slower economic growth.

"These inflation figures are bad news all round and come against a background of elevated and rising inflation expectations," said Klaus Baader, an economist at Merrill Lynch.

He added that the credibility of the anti-inflationary regime in Europe was not what it used to be.

Following the release of the figures, the European Union urged businesses, unions and governments to unite to limit the impact of high oil prices.

EU spokesperson Amelia Torres said the rise called for renewed attention and moderation from governments, social partners and companies to avoid "second-round effects".

Energy prices climbed 3.4% in November compared with a month earlier while the year-on-year rise was 9.7%.

Food prices rose 4% year-on-year or 0.7% month-on-month.

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