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Iceland reports record 34 percent inflation

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Aijaz Rahi/AP

(Read caption) Currency notes wait in a cash counter in an international bank. Inflation is up in Europe, especially in Iceland, where recent reports put its cumulative 2-year rise at 36 percent. High inflation could hurt the Euro's value.

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British inflation numbers were released today, showing a 3.4% increase. Together with the European numbers released last Friday this means that we can now summarize 2 year inflation rates, which is to say the cumulative 2 year change in consumer prices. I selected below inflation numbers for various European countries based on which countries had the most significant changes and those that were biggest (if you're interested in those that I omitted see here).

Iceland 36.4%

Romania 11.2%

Hungary 8.7%

Poland 7.0%

Lithuania 7.0%

Britain 6.4%

Greece 5.5%

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Sweden 4.4%

Estonia 3.9%

Latvia 3.6%

Italy 2.5%

France 2.1%

Czech Rep. 2.1%

Euro area 2.0%

Germany 1.6%

Spain 1.4%

Switzerland 0.7%

Portugal 0.0%

Ireland -3.1%

The following things can be noted:

-The two countries that was most different from the rest was the two island nations of Iceland and Ireland. Iceland had with its cumulative 2-year increase of 36.4% the by far biggest increase, while Ireland was the only country with a 2-year decline in consumer prices. However, Portugal came very close to register a 2-year drop (given the statistical margin of error that exists, it is possible that they did) and Romania and Hungary also had extraordinarily big price increases.

-Switzerland was the only non-Euro area European country with an inflation rate below the Euro area average, though the Czech Republic also came close. The recent rally in the Swiss franc means that the relative Swiss inflation rate will likely fall further in the near future.

-Greece had the by far biggest consumer price increases within the Euro area, while Lithuania had the biggest increases inside the Euro bloc (which also include countries with fixed exchange rates. However, LithuaniaƤs number reflects entirely a big 2009 increase, and in the latest year consumer prices have dropped somewhat. Similarly, the Latvian number conceals that in the year to March 2009, consumer prices rose 7.0%, only to fall by 4.0% the latest year.

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