Yearly euro inflation at record high of 4.1%

Yearly inflation in the 15 euro nations rose to a record high of 4.1 percent in July, the EU statistical agency Eurostat reported Thursday.

Prices have not climbed as fast since inflation records started in 1996 for the countries that eventually formed the euro.Soaring fuel and food prices are Europe's biggest economic problem, eating into household spending -- one of the engines of economic growth -- as people steer away from major purchases and luxury goods.Accelerating prices and signs that growth is stalling create a major dilemma for the European Central Bank, which acted last month to cool inflation by hiking borrowing costs for the first time in a year.But the bank may have to hold back from more interest rate increases as the European economy stumbles and companies slash staff.Eurostat reported that the jobless rate in the 15 countries that share the euro had risen to 7.3 percent in May and June from a year ago. It revised upward an earlier estimate of 7.2 percent for May as unemployment worsened from a record low it hit in December 2007.