Russia’s invasion of Ukraine has thrust the eurozone into a new economic reality where high inflation is no longer a temporary headache and seriously threatens to undo the gains of the post-pandemic recovery.
Inflation in March reached 7.5% on an annual basis, an all-time high for the eurozone.
The figure represents a stunning rise compared to one year ago when inflation was 1.3%, well below the 2% target of the European Central Bank.
The March data is the first reading from Eurostat that takes into account the consequences of the Ukraine war, which has now entered its second month with no resolution in sight.
Annual inflation – the rate at which prices for goods and services change over time – has been steadily rising since late summer, when a mismatch between supply and demand sent gas prices soaring.
