Producer prices in the euro area rose significantly in January, driven mainly by rising oil prices. This was reported by the European statistical office Eurostat. The higher prices charged by European producers for their goods are also driving inflation.
Producer prices rose by 1.4% in January compared with a 0.9% increase in December. Energy was the main driver with a plus of 3.5 percent. If the energy sector is left out of the equation, there was an increase in producer prices of 0.8%.
The price of oil is driven by optimism about the economic recovery from the coronavirus crisis and production restrictions by oil cartel OPEC and allies like Russia. The price of a barrel of American oil is already higher than before the coronavirus outbreak, which hit the demand for oil hard.