Eurozone firms’ price rises nearing all-time high: survey

Wednesday, 20 April 2011 00:10 -     - {{hitsCtrl.values.hits}}

BRUSSELS, (AFP) -The rate of inflation for eurozone goods and services raced towards an all-time high in April, a closely-watched growth indicator said Tuesday.

Prices charged by firms surveyed across the 17-state currency area showed “the largest monthly jump since the all-time high seen during the oil price peak of 2008,” said Chris Williamson, chief economist with London-based researchers Markit.

The picture emerged from Markit’s composite eurozone index for manufacturing and services output, which otherwise showed job creation hitting a three-and-a-half-year high, albeit from a high base of unemployment.

Overall, the closely-watched indicator rose only slightly to 57.8 points from 57.6 points in March, signalling an expansion in economic activity for the 21st consecutive month. Any score above 50 equates to growth.

Expansion throughout France’s economy overtook that of Germany, hitting its fastest rate since September 2000 thanks to a spike in the services sector, the data also said.

But broadly speaking, the eurozone “upturn remains all-too dependent upon France and Germany,” Williamson underlined.

Figures out at the end of last week showed eurozone inflation gaining “alarming” momentum, leaving analysts tipping a sharper rise in interest rates by the European Central Bank.

The annual rate of inflation across the debt-ravaged eurozone hit 2.7 percent in March -- and 3.1 percent for the full, 27-state European Union, including non-euro Britain and Poland.

The faster-than-forecast acceleration showed prices shooting upwards right across Europe -- fuelled by a spike in energy costs as well as for raw materials such as cotton.

Little over a year ago, the figure was just 0.8 percent.