BRUSSELS: Inflation in the eurozone jumped to its highest level since October 2018 as Covid restrictions across Europe were scaled back, boosting the economy and stoking energy prices. The rise in inflation was widely expected but will rattle investors after consumer prices in the US made their biggest leap since 2008, fuelling fears that the economy was overheating.

The EU’s Eurostat agency said consumer prices in the 19 countries that use the euro rose to 2.0 percent, beyond the target of the European Central Bank of “close to, but below” that benchmark. Price gains were mainly driven by a year-on-year hike of 13.1 percent in energy prices, Eurostat said, hugely outpacing other consumer items as inflation’s main driver. The agency said that core inflation, which strips out energy and other more volatile items, only inched up in May to 0.9 percent, from 0.7 percent a month earlier. Eurozone inflation has been on an upward trend after sinking into negative territory for several months during the first wave of the pandemic when oil prices collapsed.

Unemployment meanwhile dipped to 8.0 percent in April, Eurostat said, with the overall European job market remaining relatively spared from the fallout of the pandemic. The figure was still 0.7 percentage points higher than a year before when the impact of the pandemic was just beginning to take hold.