(BRUSSELS) - Inflation in the 15-nation eurozone jumped to a record 3.6 percent in March amid soaring oil and food prices, official EU data showed Wednesday, propelling the euro to a new high against the dollar.

The inlfation rate, the highest since the launch of the single European currency in 1999, topped the European Union's Eurostat data agency's first estimate of 3.5 percent.

Record oil and food prices have fuelled a recent rise in inflation which reached 3.3 percent in February in the eurozone. In March 2007, inflation stood at 1.9 percent.

The March rate pushes eurozone inflation even further out of the European Central Bank's comfort zone, which it defines as annual consumer price growth of close to but less than 2.0 percent.

The figures further complicate the ECB's task of keeping inflation under control in the face of an increasingly downbeat outlook for the eurozone economy.

"The final eurozone consumer price inflation (figure) will go down like a lead balloon at the ECB and undermines already limited hopes of an interest rate cut in the near term," economist Howard Archer said at consultants Global Insight.

Unlike its counterpart in the United States, the ECB has dismissed calls to cut interest rates in the face of a rapidly deteriorating economic outlook, triggered by turmoil in the US housing and financial markets.

After the data cemented expectations that an ECB rate cut was not in the cards, the euro hit an all-time peak in London of 1.5968 dollars as investors opted to put money in higher-yielding euros.

While headline inflation soared to a new high, underlying price growth, which excludes the impact of volatile items like energy and food prices, also crept up to 2.0 percent from 1.8 percent in February.

The price of New York crude oil on Wednesday struck a historic peak at 114.41 dollars per barrel as the US currency tumbled to an all-time low against the euro, traders in London said.

While oil prices rise ever higher, record food prices have sparked outbreaks of violence from Haiti to Indonesia as governments struggle to cope with shortages in the face of booming demand in fast growing Asian countries like China and India.

A breakdown of Eurostat's data showed transport fuel prices soared 14.5 percent in March over 12 months while heating oil jumped 36.1 percent. Meanwhile, food rose 6.2 percent.

Despite the record March inflation rate in the eurozone, some economists predicted that prices had either peaked or were close to it.

"Inflation has probably peaked but the slowdown will be only moderate in coming months and oil prices continuing to hit fresh highs surely doesn't help," said economist Marco Valli at Italian bank Unicredit.

"We project that (inflation) will enter a clearer downward trend and settle steadily below 3.0 percent only in November," he said. "Accordingly, ECB rate cuts probably won't be in the agenda for a while."

The European Commission warned workers against seeking big pay hikes in order to help offset the pain caused by food and energy prices, saying that it could unleash an "inflation spiral."

"It's very important that these price increases (for food and energy) don't spread to other prices, especially salaries, in order not to trigger an inflation spiral, which would be the worst result," commission spokeswoman Amelia Torres said in Brussels.

Annual inflation in the 27-nation EU as a whole ran even faster than in the eurozone in March, rising to 3.8 percent from 3.5 percent in February.

Further details - Eurostat

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