Inflation in the Eurozone reached an all-time high of 8.9% in July. This data has been another ominous sign for the bloc’s economy. Now, it is gradually slowing down, raising the likelihood of a recession.
Accordingly, prices in July continued to climb in most countries. There is worsening disruption in global energy markets due to Russia’s invasion of Ukraine.
Record Inflation In The Eurozone
There is record inflation in the Eurozone. Accordingly, the upward trends in gas prices have spilled over to other products. Also, including fresh fruits and vegetables.
Now, the July reading shows a timid regression in energy inflation. That is from 42% in June to 39.7% in July, but an increase for all of the other indicators.
However, the global food crisis disrupted supply chains. And, China’s strict zero-Covid lockdowns are also putting pressure on everyday goods and services.
Data On Rising Inflation
Different countries show different figures of inflation in the Eurozone. Accordingly, in Germany, the EU’s industrial powerhouse, inflation rose to 8.5% on a yearly basis.
France’ prices on the other hand, rose by 6.8%, while Italy’s grew at a 8.4% rate.
And, the Baltic countries remain particularly affected by the upward trend. Accordingly, Estonia (22.7%), Lithuania (20.8%) and Latvia (21%). That is due to their heavy reliance on foreign imports to meet their energy needs.
ECB To Indicate Inflation In The Eurozone
The European Central Bank (ECB) has announced a larger-than-expected hike in interest rates. That is the first move of that kind in 11 years.
Accordingly, the ECB has indicated it will continue hiking rates if the economic situation deteriorates. Now, it is ditching the traditional forward guidance and embracing instead a meeting-by-meeting approach to decide its next steps.