PANews reported on March 31 that eurozone inflation surged this month, exceeding the European Central Bank's (ECB) 2% target, driven by a sharp rise in oil and gas prices. This has exacerbated the policy dilemma, as high energy costs are dragging down economic growth and also risk triggering an inflationary spiral. Data released by Eurostat on Tuesday showed that the eurozone's overall inflation rate rose to 2.5% in March from 1.9% in the previous month, with energy costs increasing by 4.9%. A rapid rise in energy inflation could easily spread if businesses factor in increased costs and workers demand higher wages due to declining real disposable income. ECB President Christine Lagarde stated last week that if the central bank remains on hold, the public may begin to question its commitment to combating inflation, which would strengthen the case for raising interest rates even in the event of a large but short-lived inflationary shock. Financial markets currently expect the ECB to raise interest rates three times this year, with the first potentially in April or June. While some officials, including Bundesbank President Jean-Claude Nagel, have indicated that a rate hike as early as April is an option, others, such as Executive Board member Schnabel, have warned against hasty action.