New figures from Germany could increase the chances of an interest rate increase from the European Central Bank next month.
German factory gate prices recorded their biggest leap in almost two years in May, with an annual increase of 6%, figures released by the federal statistics office showed. On a monthly basis, producer prices gained 1%.
The increases were strongest in the energy and food sectors. The overall cost of energy soared by 15% over the year. When energy was stripped out, producer prices gained 2.9% from May 2007. Petroleum products posted an annual rise of 25.9%, with light heating oil spiking by 64.6%.
Annual inflation hit a record 3.7% last month in the euro zone, well above the ECB's target of just below 2%.
