High oil prices and tobacco pushed up consumer prices in the 12-nation euro zone to an expected 2.1 per cent annual rate in April, the European Union's statistics agency Eurostat said today.
Month-on-month euro zone inflation rose an expected 0.4 per cent last month, fuelled by mainly clothing and transport prices, Eurostat said.
The annual inflation rate was stable from March and February and in line with the statistics office's initial estimate for April.
"Fuels for transport had the largest upward impact on the headline rate, followed by heating oil and tobacco," Eurostat said. "The main components with the highest monthly rates were clothing and transport," it said.
Fuels for transport rose 10.8 per cent year-on-year and heating oil prices surged 33.4 percent, Eurostat said.
Housing prices grew 4.7 per cent year-on-year in April, alcohol and tobacco rose 4.3 per cent and transport costs were up 4.2 per cent.
The European Central Bank (ECB), which has kept interest rates at historic lows of 2.0 per cent since mid-2003, aims to keep annual inflation below, but close to 2.0 per cent.
The ECB expects stable inflation this year and economists believe the bank will not change the costs of borrowing until the end of 2005 amid sluggish economic growth in the euro zone plagued by high unemployment and weak confidence.
Eurostat also said industrial production in the euro zone fell a seasonally adjusted 0.2 per cent in March against February for a 0.1 per cent year-on-year decline.