Inflation rise fuels ECB rate fears

EUROPEAN inflation accelerated more than previously estimated to the fastest in more than two years in March, led by surging energy costs, adding pressure on the European Central Bank to keep raising interest rates.

Inflation in the 17-nation euro region quickened to 2.7% from 2.4% in February, the European Union’s statistics office in Luxembourg said. That’s above an initial March estimate of 2.6% and the fastest since October 2008. Euro-area exports rose 1.6% in February from the previous month, a separate report showed.

The ECB, which aims to keep inflation just below 2%, increased borrowing costs for the first time in almost three years last week to keep increasing price pressures from feeding into wage demands as the economy strengthens. In Germany, unemployment has dropped to the lowest in almost two decades and speciality chemicals maker Lanxess AG boosted prices this month to offset higher raw-material costs.