Euro zone inflation jumped to new record highs in March while economic sentiment eased for the 10th month in a row, data showed on Monday, deepening the European Central Bank's interest rate dilemma.
Inflation in the 15 countries using the euro accelerated to 3.5 percent year-on-year in March from 3.3 percent in February, European Union statistics office Eurostat said.
The ECB wants inflation to be below, but close to 2 percent and is expecting a temporary "hump" in price rises. But it also faces slowing growth and markets expect it to cut interest rates later this year from the current 4.0 percent.
The Eurostat estimate does not contain month-on-month data or a detailed breakdown, but Belgian and German inflation numbers released on Friday suggest the rise was fuelled by energy as oil hit a record $111.8 per barrel.