Eurozone inflation rises to 2.8pc

BERLIN, April 30 (BBC): The eurozone's inflation rate edged up to 2.8 per cent in April from March's figure of 2.7 per cent, according to official data from Eurostat. The increase takes inflation further away from the European Central Bank's target of just below 2 per cent. The cost of raw materials and high energy prices has contributed to the increase. The ECB started raising rates in April from their record low, with a quarter point increase to 1.25 per cent. The rise in the inflation rate will put pressure on the ECB to raise interest rates further. "It's slightly higher than consensus but that wasn't a complete surprise. We saw from Germany and Spain, which already published numbers, that it could go this way," said Piet Lammens, economist at KBC. "However, I can imagine that some market participants will expect the rate increase by the European Central Bank at an earlier date. We expected June, the market is still expecting July. I guess the consensus will now move to June," he added. However, policymakers at the ECB will also be keenly aware of the austerity measures in countries such as Greece, the Irish Republic and Portugal.