Rising prices in the European countries is becoming a cause for concern. Inflation touched its highest level this month, since the outbreak of the coronavirus pandemic.

According to a report by Financial Times, end customers have been impacted with rise on costs as European manufacturers “are passing higher input costs” on to them. Shortage of materials and disruption of supply chain have also led to rise in concerns.

“As we go into the recovery in the second half of this year, this inflation at the factory gate will increasingly be passed through to the consumer,” FT quoted Katharina Utermöhl, economist at Allianz as saying.

A Flash Estimate indicated that the main items components of inflation included food, alcohol and tobacco besides services, non-energy industrial goods and energy.

Inflation typically has a direct bearing on the cost of living and the cost of doing business. Consumer spending is most impacted and at a time when Europe is struggling to get out of the Covid 19 induced economic recession, high prices could become even more of a concern. In additional, high prices also affect borrowing, mortgages, bond yields for both government and corporate.

Europe is already facing a collapse in consumption due to extended lockdown to contain the spread of the deadly virus with many production units having to shut down either temporarily or permanently.