Finland's inflation climbed to 8.8 percent during February, according to preliminary data released on Tuesday by Statistics Finland.
Inflation had previously dipped slightly to 8.4 percent in January.
The year-on-year change in consumer prices was driven in particular by a rise in the cost of electricity as well as an increase in interest rates.
Statistics Finland attributed the slight rise in the inflation rate to increases in the average mortgage interest rate and higher district heating costs.
Food prices rising at accelerating rate
While the overall rate of inflation was just below 9 percent in February, the year-on-year increase in the price of food stood at 16.3 percent last month.
This is a record high level, exceeding even the 16.1 percent price rises seen in November and December and well above the previous high of 12 percent, recorded in 1964.
The prices of staple foods such as sugar, flour, butter and eggs are rising particularly fast — with all seeing inflation rates of well over 30 percent compared to February 2022 — but Statistics Finland noted that no product group has seen a year-on-year drop in price.
While the rise in coffee prices — which hit 50 percent in March last year — has stabilised somewhat, a store-bought pack of coffee still cost 7 percent more last month compared to February 2022.
The price of fish also saw a 50 percent price rise last year, in May, and saw a further 17 percent hike last month.
Of the three main areas of expenditure — housing, food and transport — for people in Finland, food has consistently seen the highest price rises since August.
Food prices have risen by an average of about 12 percent per month, while transport costs have slowed to about 9 percent in recent months.
On average, people spend about 27 percent of their consumption levels on housing, 13 percent on food and 12 percent on transport. This means that the increase in housing costs hits the average consumer harder than the rise in food or transport costs.
Housing costs were up by nearly 12 per cent last month, driven in particular by mortgage interest rates, which rose by a staggering 173 percent as the Euribor reference rate shot up.
The All Points North podcast looked at mortgage interest rates, and what you can do if your rate is about to be adjusted updwards.
These rising prices have squeezed people's purchasing power, especially last year, when wages failed to keep pace with exceptionally high inflation. The situation looks somewhat better this year, as wages and pensions are expected to rise in real terms while the rate of inflation is forecast to ease towards the end of the year.
"The decline in purchasing power may end this year, but it is a good question as to whether wage increases will be enough to compensate for the hit in real earnings," according to llkka Kiema, Head of Forecasting at the Labour Institute for Economic Research (Labore).
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