IN AUGUST, YEARLY INFLATION IN THE EUROZONE REACHED A RECORD 9.1%
With an increase in energy costs mostly resulting from Russia's conflict in Ukraine, the eurozone's inflation rate in August reached a new high of 9.1%.
According to the most recent statistics made public on Wednesday by the European Union statistics office Eurostat.
The 19 countries saw an increase in annual inflation from 8.9% in July. Since records for the euro's history began to be kept in 1997, it is at its greatest level.
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Officials of the European Central Bank (ECB) are under more pressure to keep raising interest rates as a result of the most recent data. For the first time in 11 years, the ECB increased interest rates in July by half a percentage point.
Due to price hikes across the globe brought on by Russia's ongoing conflict in Ukraine, household budgets are being squeezed.
Prices have also increased as a result of disruptions to the world's manufacturing supply chains brought on by the coronavirus epidemic.
Workers demanding more pay and others fed up with the high cost of living have caused a wave of protests and strikes this summer all across the world.
According to official figures released earlier this month, inflation in countries with their own currencies like Britain, Denmark, and Norway is also skyrocketing. Regulators warned this week that yearly residential energy costs will increase by 80% for UK consumers.
According to Eurostat's preliminary estimate, the price of food increased at a quicker rate of 10.6% than the price of energy, which increased by 38.3% throughout the eurozone despite the rate being significantly lower than the previous month.
Typically unchanged is the agency's final report, which is made public approximately two weeks later.
"Specific issues in Europe are still driving inflation up, "Bert Colijn, a senior economist at ING Bank, stated in an analyst note.
"At the present, droughts and the crisis in the gas supply are adding to the supply-side pressures on inflation that already exist."
Major energy supplier Russia has been restricting the flow of gas to European nations that have allied with Ukraine in the conflict, a decision that has had a disastrous impact on pricing.
Meanwhile, a record-breaking drought that has affected nearly half of Europe is affecting agricultural businesses, limiting the output of basic commodities like corn, and raising food prices.
Additionally, the dollar-euro exchange rate has fallen below parity, which might increase the price of imported products, particularly oil, which is priced in dollars.
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