Eurozone inflation soars while US price rises steady

Inflation in the eurozone accelerated to a new 16-year high in March, catching economists by surprise and canning any chances that the European Central Bank might soon be able to follow the US and UK in cutting interest rates to stimulate the economy. The latest eurozone consumer price index stood at 3.6 per cent, up from 3.3 per cent in February, due to rising energy and food costs.

In the US, where concerns about inflation have risen sharply despite the Federal Reserve's insistence that an economic slowdown will moderate prices later in the year, the consumer price index for March stood at 4 per cent, unchanged on the previous month.