BBC News
watch One-Minute World News
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.

SEE ALSO
Euro inflation at two-year high
15 Nov 07 |  Business
No change in European bank rate
08 Nov 07 |  Business
Euro bursts to fresh dollar high
01 Oct 07 |  Business
European economy 'sound' - Trichet
11 Sep 07 |  Business
Eurozone growth more than halved
04 Sep 07 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific