Soaring energy costs pushed euro zone producer prices up in February in line with expectations, data showed today, pointing to inflationary pressures from more expensive oil.
Prices at factory gates in the 15 countries using the euro rose by an expected 0.6 per cent month-on-month for a 5.3 per cent year-on-year gain, the European Union's statistics office said.
Eurostat also revised up by 0.1 percentage point the January producer price growth data to 0.9 per cent month-on-month and 5.0 per cent year-on-year.
Core producer price inflation, a measure excluding the volatile energy and construction components, was 0.5 per cent month-on-month and 3.6 per cent annually -- against 0.7 per cent and 3.4 per cent, respectively, in January.
Producer prices are an early indication of inflationary pressure because their increases, unless absorbed by retailers via lower profit margins, eventually translate into higher costs for consumers.
The European Central Bank wants annual inflation to be just below 2 per cent. It was at a record high of 3.5 per cent in March and economists expect it will stay well above the ECB target for much of 2008.
The Eurostat data showed producer prices of durable and non-durable consumer goods, which give an indication of the immediate pressure on prices paid by consumers, rose 2.2 per cent and 4.7 per cent year-on-year respectively in February.