Inflation in the Eurozone unexpectedly increased last month, likely making for more uncomfortable reading at the European Central Bank, which has frequently underestimated price pressures and been criticised for it by some of its own policymakers.

Inflation in the Eurozone's 19 member countries increased to 5% from 4.9% in November, a new high for the currency bloc and well above economists' expectations of 4.7%.

Energy prices remained the biggest driver, up 26% YoY, while increases in food, services, and imported goods were also significantly above the ECB's overall 2% inflation target, according to Eurostat statistics released on Friday.

With the economy coming back to life after the initial pandemic shock last year, price growth surged, catching the ECB, which only expected a moderate inflation hump a few months ago, off guard.

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Supply-chain bottlenecks exacerbated the rising pressure, limiting consumer product availability, while consumers forced to save for a year began spending on everything from new cars to restaurant meals.

The ECB expects inflation to fall below 2% by the end of the year, but a slew of influential policymakers are sceptical, warning that risks are skewed toward higher rates and that above-target readings could persist into next year.

Part of the reason for the concern is that underlying prices, or inflation excluding volatile food and fuel costs, are also over target, implying that industries that have been subject to weak pricing pressures in the past decade are now adjusting.

Indeed, ECB-watched inflation excluding food and fuel costs climbed to 2.7% in December from 2.6%, while a narrower measure that also excludes alcohol and tobacco products remained unchanged at 2.6%. Both figures were slightly higher than expected.