Inflation is surging across Europe with an unexpected rise in Spain, while German inflation hit a 70-year high in May, scuppering hopes that inflation within the Eurozone is starting to level off. 

Inflation in Germany has reached 7.9 per cent, the highest since 1952. Europe’s largest economy has been hit hard by soaring food and energy prices, partly driven by the war in Ukraine.

Capital Economics predicts that core inflation (a measure for products that don’t include food and energy) will remain above the European Central Bank’s two per cent target throughout 2022 and into 2023.

In Spain, inflation rose unexpectedly after a dip in April, with core inflation rising at its fastest rate for 26 years. In March, Spain reported 9.8 per cent inflation which then fell to 8.3 per cent in April, before rising to 8.9 per cent in May.

Eurozone inflation data for May is set to be released on Tuesday, having risen to 7.5 per cent in April. These figures come as it looks increasingly likely that the ECB will raise interest rates in July for the first time in a decade.