Producer prices in the 17 countries that share the euro increased to a fresh two and a half year high to close the first quarter on surging energy costs that could trickle down to consumers, according to Bloomberg. On Tuesday, the European Union reported that producer prices increased in March to an annual increase of 6.7%, which is the most since September 2008. Economists had forecast a year-over-year increase of 6.6% in March after a gain of the same size in the year to February. Prices were 0.7% high month-on-month.
The pressure is mounting on companies in the region to pass on surging input prices to consumers. Beyond that, European Central Bank President Jean-Claude Trichet has warned that there are “risks of second-round effects,” such as wage increases, form the current elevated level of inflationary pressure. According to The Wall Street Journal, the Organization for Economic Cooperation and Development reported separately that consumer prices in developed economies increased by the largest amount since October 2008 during March
Click here to read the story on the eurozone PPI from Bloomberg News.
Click here for coverage of the OECD report from The Wall Street Journal.