Inflation in eurozone soars to new record high

Economy
By Liam

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Eurozone inflation rises to new all-time high – now worse than in Britain

By Hugo Duncan for the Daily Mail

Published: 21:50 BST, September 30, 2022 | Updated: 22:27 BST, September 30, 2022

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Inflation in the eurozone has risen to a new all-time high – and is now worse than in Britain.

In a report pressuring the European Central Bank (ECB) to continue aggressive rate hikes, the official statistics agency Eurostat said inflation in the single currency bloc was 10 percent in September.

That overshadows the rate of 9.9 percent in the UK and 8.5 percent in the US, underlining how countries around the world are in the throes of a cost of living crisis.

Inflation in eurozone soars to new record high

Households and businesses have been beset by rising prices of everything from gas and electricity to fuel and food in the wake of the pandemic and the invasion of Ukraine.

European countries in particular suffer from the fact that Russia cuts off the gas supply while it is waging war.

Within the eurozone, inflation is highest in Estonia, at 24.2 percent, and lowest in France, at 6.2 percent, thanks to large subsidies on energy bills. In Germany it is at the highest point in 70 years of 10.9 percent, while in the Netherlands it is 17.1 percent.

The numbers will put pressure on the ECB to continue raising interest rates in the coming months to bring inflation back under control.

In July, it raised interest rates for the first time in more than a decade, from minus 0.5 percent to zero, before raising them again to 0.75 percent in September. A bumper increase of 0.75 percentage point is expected this month.

ECB President Christine Lagarde said this week: ‘we will do what we have to do’ to tackle inflation, and Slovakian central bank governor Peter Kazimir said: ‘We have to be strong and even ruthless, regardless of the looming recession.’

Commenting on the latest rise in inflation yesterday, analysts at ING said: ‘ECB officials have every reason to ramp up the aggressive rhetoric.’

The Bank of England is also expected to act strongly at its next meeting, to be held in early November.

A Reuters poll found that economists do not believe there will be an emergency rate hike in the UK before next month.

But they think there will be an increase of 0.75 or one percentage point in November.

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