Inflation is very high in the Eurozone. Protesters in Italy used empty shopping trolleys to demonstrate the cost of living crisis.
Stefano Montesi – Corbis | Corbis News | Good pictures
Eurozone inflation rose above 10% in October, highlighting the severity of the cost-of-living crisis in the region and adding more pressure on the European Central Bank.
Preliminary data from Europe’s statistics office on Monday showed inflation came in at 10.7% year-on-year last month. This marks the highest monthly reading since the formation of the euro zone. The 19-member group has faced higher prices over the past 12 months, particularly for energy and food. But increases are stressed Russia’s invasion of Ukraine In late February.
This proved to be the case once again, with energy costs expected to witness a sharp annual rise of 41.9% in October, up from 40.7% in September. Food, liquor and tobacco prices also rose during the same period, rising 13.1% from 11.8% in the previous month.
Monday’s data comes after individual countries reported flash estimates last week. In Italy, core inflation came in at 12.8% year-on-year, beating analysts’ expectations. Germany also said inflation rose to 11.6%, while in France the figure reached 7.1%. The different values reflect actions taken by national governments, as well as the level of dependence countries have or have had on Russian hydrocarbons.
However, there are euro countries where inflation has risen above 20%. This includes Estonia, Latvia and Lithuania.
The European Central Bank – whose primary goal is to control inflation – on Thursday confirmed further rate hikes in the coming months in an attempt to lower prices. It said in a statement that it had made “substantial progress” in normalizing rates in the region, but “expected to raise interest rates further to ensure a timely return of inflation to its 2% medium-term inflation target.”
Last week the ECB decided to raise rates by 75 basis points for the second time in a row.
After participating in the press conference and commenting, ECB President Christine Lagarde He said the possibility of a recession in the Eurozone has intensified.
Growth figures released on Monday showed the gross domestic product (GDP) figure for the euro area rose 0.2% in October. This is after the region grew at a rate of 0.8% in the second quarter. Only Belgium, Latvia and Austria recorded GDP rates below zero.
So far, the 19-member group has weathered recession, but economic slowdown is evident. Many economists have predicted a contraction in GDP in the current quarter.
The Euro The U.S. dollar traded flat in early European trading hours on Monday ahead of the new data releases, and was little moved after the new figures.. The euro remains weak against the greenback, and the ECB is concerned that this could further fuel inflation in the euro zone.
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