Malta registers highest cost of living increase in euro area

Malta registered the highest monthly increase in the cost of living in the euro area last month according to new statistics published by Eurostat in Brussels today.

Compared to May, inflation increased by 0.6 per cent during June reaching 3.1 per cent. Malta's inflation rate stood at 2.5 per cent in May.

According to the EU's statistics arm, while average inflation in the euro area remained unchanged between May and June, at 2.7 per cent, Malta's has now surpassed the euro area's average.

Still, Malta does not have the highest annual inflation rate in the euro area.

In June, annual inflation was highest in Estonia (4.9 per cent), Cyprus (4.5 percent) and Slovakia (4.1 per cent).

On the other hand, the lowest annual inflation rates in June were registered in Slovenia (1.6 per cent) and Ireland (1.2 per cent).

Following relatively low inflation rates in the euro area in the past years, particularly due to the economic crisis, the cost of living has started to increase across the euro area prompting the European Central Bank (ECB) to revise upwards its interest rates for the euro area.

Last week, the ECB increased for the second time this year, its basic interest rates to 1.5 per cent.

As inflation is predicted to continue to rise, further increases of interest rates by the end of this year are probable.