- The annual rate of inflation in the Eurozone reached a new high of 9.1% in the year leading up to August.
- There are calls for the European Central Bank to raise interest rates more aggressively.
- The inflation rate is above the 9% that economists polled by Reuters had forecast.
The annual rate of inflation in the Eurozone reached a new high of 9.1% in the year leading up to August, heightening concerns that skyrocketing prices are becoming rooted in the economy and increasing calls for the European Central Bank to raise interest rates more aggressively the following week.
Eurostat released a quick estimate of consumer price growth on Wednesday. It was up from 8.9% in July, which was a record high for the euro in its 23-year history.
It was also more than the 9% that economists polled by Reuters thought it would be.
As a result of Russia’s invasion of Ukraine, wholesale prices for gas and electricity in Europe have reached record highs in recent weeks, and the cost of fertiliser and other agricultural goods like wheat has also gone up.
Eurostat said that energy prices, which had gone up 38.3% in the year leading up to August, had slowed down a bit.
The prices of unprocessed foods also went up, but not as quickly, by 10.9%.
The highly watched measure of core inflation, which gives analysts a clearer indication of underlying pricing pressures by excluding the more volatile prices of energy and food, increased by 4.3% in August, which is an increase from the 4% increase that was seen in July.
Even if the economy of the eurozone enters a recession this year, as many economists anticipate will be the case, several members of the ECB’s governing council have issued warnings that high inflation will become more entrenched as an increasing number of consumers and businesses expect it to remain elevated.
