BRUSSELS, April 4 (Reuters) - Euro prices at factory gates jumped in February, boosted by a surge in energy costs, data showed just three days before the European Central Bank is to raise interest rates for the first time in almost three years.
The European Union's statistics office Eurostat said producer prices in the 17 countries using the euro rose 0.8 percent month-on-month for a 6.6 percent year-on-year increase, signalling growing inflationary pressures early in the pipeline.
Economists polled by Reuters had expected a 0.7 percent monthly gain and a 6.7 percent annual rise.
Energy prices rose 1.2 percent month-on-month for a 12.8 percent year-on-year increase.
But Eurostat also revised down producer price data for January to 1.3 percent month-on-month from 1.5 percent and to 5.9 percent year-on-year, from 6.1 percent.
Producer price increases, unless absorbed by intermediaries and retailers, translate into higher consumer process, the growth of which the ECB wants to limit to below, but close to 2 percent year-on-year over the medium term.
Consumer price inflation was 2.6 percent in March, Eurostat estimated last week, up from 2.4 percent in February.
According to an indicator designed to predict inflation trends from the Economic Cycle Research Institute inflationary pressures in the euro zone reached a 29-month high in February.
Economists expect consumer inflation will remain above the ECB target in 2011 and that an April 7 rate rise could be just the first of several this year.
The ECB's main rate is now at a record low of 1 percent, and some economists expect it could go up to 1.75 percent by the end of 2011 as the ECB tries to prevent rising oil and food prices leading to increases in wages and prices in other sectors of the economy, in what it calls second-round effects.
(Reporting by Jan Strupczewski, editing by Rex Merrifield) Keywords: EUROZONE PPI/ (jan.strupczewski@reuters.com; +32-2-287 6837; Reuters messaging: jan.strupczewski.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The European Union's statistics office Eurostat said producer prices in the 17 countries using the euro rose 0.8 percent month-on-month for a 6.6 percent year-on-year increase, signalling growing inflationary pressures early in the pipeline.
Economists polled by Reuters had expected a 0.7 percent monthly gain and a 6.7 percent annual rise.
Energy prices rose 1.2 percent month-on-month for a 12.8 percent year-on-year increase.
But Eurostat also revised down producer price data for January to 1.3 percent month-on-month from 1.5 percent and to 5.9 percent year-on-year, from 6.1 percent.
Producer price increases, unless absorbed by intermediaries and retailers, translate into higher consumer process, the growth of which the ECB wants to limit to below, but close to 2 percent year-on-year over the medium term.
Consumer price inflation was 2.6 percent in March, Eurostat estimated last week, up from 2.4 percent in February.
According to an indicator designed to predict inflation trends from the Economic Cycle Research Institute inflationary pressures in the euro zone reached a 29-month high in February.
Economists expect consumer inflation will remain above the ECB target in 2011 and that an April 7 rate rise could be just the first of several this year.
The ECB's main rate is now at a record low of 1 percent, and some economists expect it could go up to 1.75 percent by the end of 2011 as the ECB tries to prevent rising oil and food prices leading to increases in wages and prices in other sectors of the economy, in what it calls second-round effects.
(Reporting by Jan Strupczewski, editing by Rex Merrifield) Keywords: EUROZONE PPI/ (jan.strupczewski@reuters.com; +32-2-287 6837; Reuters messaging: jan.strupczewski.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.