Brussels | Friday, April 29, 2011 10: 02 am EDT
Brussels (Reuters)-the euro-zone inflation rose above ECB target in April, increasing chances of a rate hike in June, despite the weak economic performance and household demand.
Inflation rose in 17 countries using the euro to 2.8 per cent in the last month of 2.7 percent a month earlier, its highest level since October 2010, when it was 3.2 per cent.
The consensus forecast was for reading flat compared with March, ahead of a meeting "European Central Bank on interest rates next Thursday. Analysts said the figures put odds on a rise in rates in June.
"Ellen shoiling, Chief Economist at ABN AMRO," Although we expect an increase in the July meeting, tends towards a balance of risks "precedent.
The ECB raised its key interest rate from the lowest record 1.0 to 1.25 percent in April, concerned about the impact on consumer prices from rising energy costs and food.
"The upside surprise relative to expectations may be due to the impact of stronger than expected from Easter, which means that core inflation might be a touch firmer than we thought," said Marco, Economist at UniCredit.
"We see inflation hovering around current levels for some time, with further accelerating to 3 percent of the likely end of summer".
Other data this month, however, suggested that culminate in Germany and the euro area and personalities from Spain, the biggest economy under threat in the debt crisis in Europe, showed a rise in unemployment and retail sales sank.
A survey of "EC" monthly economic performance in the euro area, as all fell for the second consecutive month to 106.2 in April, 107.3 in March, below market expectations of declining to 107.0.
"The combination of high oil prices and the rising euro and tightening and cash began to unravel the economic mood in the euro area," said Martin van Viet, Economist at ING.
Decline in sentiment permeates all sectors of the economy except for construction, consumer optimism falling more than others-11.6-10.6 in March.
The loan is not paid
The ECB also showed that the annual growth rate of loans to the private sector in the single currency has slowed in March, bucking expectations high, but accelerated the growth of money supply M3.
Belgium said the eurozone economy vanguard, faster-than-expected first quarter economic growth of 1 percent quarter-on-quarter, compared with 0.6 per cent expected on average by economists surveyed by Reuters news agency.
"Monetary data continue to point to modest recovery in the euro area money and credit growth," said Christophe pulls, Economist at Commerzbank.
"While data itself does not refer to the upside risks to price stability that require cash, is further proof that the economic situation has changed considerably since 2009 – why the ECB believes that the very low interest rates are no longer appropriate.
GDP data for the whole euro area due on 13 May.
Seen more evidence of weak demand in the retail sales data.
Sales in Germany fell in March, defying expectations rise as consumers buy fewer groceries and textiles during the month when inflation exceeded 2 per cent.
Consumer prices adjusted, sales declined by 2.1 per cent last month, and 3.5% on an annual basis.
Decline in demand for consumer goods was more pronounced in the euro zone countries "marginal" seeks to restore market confidence in their public finances with strict austerity measures.
Sales in Spain fell 8.6% year on year in March and in Greece fall of 10.6 percent in February.
Eurozone consumer inflation expectations could escalate rapidly since November 2010, edged down marginally to 30.7 of 30.8. Selling price expectations between manufacturers on the rise since the August 2010, decreased more significantly to 21.5 from 24.4.
Business climate index "European Commission", which refers to the business cycle, for the second consecutive month, to the point of 1.28 1.43 in March.
The Committee said "However, the current level of the index remain near historic peaks, indicating a continued recovery in the industry in the coming months."
Eurostat data showed that euro-zone unemployment held steady at 9.9 per cent of the workforce in March.
(Additional reporting by offices in Brussels, Madrid, Berlin and Frankfurt and Athens; editing by Merrifield Rex and Patrick Graham)
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