Inflation in Eurozone rises leading to added concerns
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Rising prices in the European countries is becoming a cause for concern. Inflation touched its highest level this month, since the outbreak of the coronavirus pandemic.</p>
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According to a report by Financial Times, end customers have been impacted with rise on costs as European manufacturers &ldquo;are passing higher input costs&rdquo; on to them. Shortage of materials and disruption of supply chain have also led to rise in concerns.</p>
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&ldquo;As we go into the recovery in the second half of this year, this inflation at the factory gate will increasingly be passed through to the consumer,&rdquo; FT quoted Katharina Uterm&ouml;hl, economist at Allianz as saying.</p>
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A Flash Estimate indicated that the main items components of inflation included food, alcohol and tobacco besides services, non-energy industrial goods and energy.</p>
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Inflation typically has a direct bearing on the cost of living and the cost of doing business. Consumer spending is most impacted and at a time when Europe is struggling to get out of the Covid 19 induced economic recession, high prices could become even more of a concern. In additional, high prices also affect borrowing, mortgages, bond yields for both government and corporate.</p>
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Europe is already facing a collapse in consumption due to extended lockdown to contain the spread of the deadly virus with many production units having to shut down either temporarily or permanently.</p>
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