Inflation reaches highest level in 40 years

Daily life became 5.2 percent more expensive in November than the same month a year earlier. That is the biggest increase in prices Netherlands residents pay for goods and services since September 1982, reported Statistics Netherlands (CBS). Gas and electricity became considerably more expensive, but clothes also rose in price. Inflation last month was significantly higher than the 3.4 percent in October.

Electricity was three quarters more expensive in November than last year. Gas prices rose by more than half, and petrol was 31 percent more costly than a year earlier. Netherlands residents had to pay over 5 percent more for clothing. Food and drink became 1.1 percent more expensive, with food prices rising much faster than in October.

The picture is similar to last week. Then the European stats agency Eurostat reported that the inflation rate for the Netherlands, determined by the European measurement methods, was 5.6 percent in November, according to provisional figures. That was the highest figure since these measurements began in 1997. Inflation for all euro countries together reached a new record.

The European Central Bank, tasked with keeping inflation at around 2 percent, is not planning to intervene despite the sharp price increases. Interest rates are still at historically low levels. Cheap money usually stimulates inflation.

According to the central bank's policymakers, the causes behind the high inflation rate are temporary. The high prices are partly due to industry catching up to the surprisingly rapid economic recovery from the coronavirus crisis. In addition, the pandemic caused very low inflation in 2020, sometimes even falling prices, they argue.