Eurozone inflation surges to 1.1% in December

Eurozone inflation has surged to its highest rate in more than three years, driven by increased prices for energy, food, alcohol and tobacco.

The annual inflation rate hit 1.1% last month, according to official statistics agency Eurostat, a sharp jump from November’s rate of 0.6%.

The rate is the highest since September 2013, when inflation was also 1.1%.

The higher-than-expected increase brings inflation closer to the European Central Bank’s target of just below 2%.

ECB chief Mario Draghi has said he expects inflation to reach the target by 2018 or 2019.

Last month’s increase was driven mainly by a jump in energy prices, which rose by 2.5% year-on-year in December, their first increase in over a year. Energy prices were boosted by oil cartel Opec’s decision to cut output.

Food, alcohol and tobacco prices rose 1.2% year-on-year, while services were also 1.2% more expensive than a year ago.