Europe News

Euro zone inflation near 4-year high, adds to pressure on ECB

Euro zone inflation jumped to 1.9 percent in April from 1.5 percent in March driven by energy prices, flash data showed Friday. Inflation is now at its highest level since 2013.

The biggest increase among the main components was seen in services, which rose to 1.8 percent from 1 percent in March.

Once again the improved headline figure raises further tpressure on the European Central Bank, whose mandate is to keep inflation below but close to 2 percent. However, the bank believes that the data isn't yet strong enough to tighten its policy.

"Underlying inflation pressures continue to remain subdued and have yet to show a convincing upward trend," ECB President Mario Draghi said Thursday.

"The ongoing volatility in headline inflation underlines the need to look through transient developments which have no implication for the medium-term outlook for price stability," he added.

The ECB kept its benchmark interest rate at zero percent on Thursday though Draghi suggested that downside risks to the bloc's economy had diminished and its economic recovery picked up pace.

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