Ballooning consumer prices return in Luxembourg

One step forward and two steps back for inflation in Luxembourg, which accelerated last month due to rebounding prices for petroleum products, national statistics agency Statec said on Wednesday.

Consumer prices grew from an annual rate of 6.8% in May to 7.4% in June, Statec said. That followed a drop of 3.9% between April and May, Statec said.

The renewed increase in prices was particularly marked by the cost of petroleum products rising by 6.1% in one month as well as spiraling food costs, Statec said.

Petrol prices rose by 11.1% in June compared to the previous month, while diesel increased by 8.1%, Statec said. Prices of all products derived from oil were 56.3% higher last month than they were in June 2021, the statistics agency said.

A series of interest rate increases by the European Central Bank are possible this year to deal with spiralling inflation at the same time that the risk of economic recession is growing, Gaston Reinesch, governor of Luxembourg's central bank said last week.