BRUSSELS, May 5 (Reuters) - Euro zone producer prices accelerated in line with expectations in March, driven by increases for energy and intermediate goods, data showed on Wednesday, reinforcing forecasts of higher consumer inflation in the coming months.
European Union statistics office Eurostat said prices at factory gates in the 19 countries sharing the euro rose 1.1% month-on-month for a year-on-year increase of 4.3%, a 29-month high. That compared with market expectations of respectively 1.1% and 4.2%.
Changes in prices at factory gates are usually transmitted to final consumers and therefore herald trends in inflation that the European Central Bank targets with its monetary policy.
Euro zone consumer inflation jumped in April to a two-year high of 1.6%, taking another step higher in a sharp climb that could push it above the European Central Bank’s target of near 2% later this year.
The ECB has predicted the surge, warning that inflation may even exceed its target by the close of the year, but has promised to look past what it expects to be a temporary spike in its policy decisions.
U.S. Treasury Secretary Janet Yellen said on Tuesday that rate hikes may be needed to stop the economy overheating as President Joe Biden’s spending plans boost growth, though later said she saw no inflation problem brewing.
The main change in producer prices in March came from a jump in energy costs, which were up 10.3% year-on-year. But even excluding energy, producer prices rose 2.3% in March after an 1.2% increase in February.
Prices of intermediate goods rose 4.4% year-on-year in March after a 2.5% rise in February. Price rises for capital and durable consumer goods also accelerated, while for non-durable consumer goods they rose after three months of declines.
(Reporting by Philip Blenkinsop)