Sharp rises in food and petrol prices drove inflation in the euro zone to an annual level of 3.1% in December, well above the European Central Bank’s two per cent target for price stability. The European Union’s official statistics agency Eurostat says the consumer price index for the region rose 0.4% month-on-month.

The biggest upward pressures came from education; up 9.4% on the year, transport up 5.6% and food up 4.8%. Inflation in Spain hit a 12-year high of 4.3%, in Germany it was 2.8% and in France 2.6%.

The euro zone figures are in line with expectations and confirm an initial estimate from earlier this month. Economists said price growth may have reached its peak, but the downward trend will be gradual with inflation likely to remain above 2% for most of this year.

In all the 27 countries of the European Union, inflation was also 0.4% month-on-month and was slightly higher than the euro zone at 3.2% year-on-year.

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