Inflation in the Eurozone Hits Another Record Highs in July

The price increase in Europe over the month reached 8.9%, exceeding June’s record high of 8.6%. Experts call the rise in energy prices resulting from the war in Ukraine the main driver of inflation. The sharp rise in energy prices due to the war in Ukraine leads to the fact that inflation in the euro area sets new records. For example, consumer prices in July soared 8.9% as compared to the same month last year. These are the preliminary estimates of cumulative price growth released Friday, July 29, by the EU’s statistics agency Eurostat. However, economists expected that the indicator will not change as compared to June and will amount to 8.6% year-on-year. In May, the pan-European inflation reached 8.1%, in April – 7.4 %. This means that the current inflation rate is still well above the European Central Bank’s target of 2%. Experts and ECB head Christine Lagarde have already initiated an interest rate hike due to soaring inflation. A week ago on Thursday, the ECB announced its first key interest rate hike in eleven years by 50 basis points. That was twice as much as originally announced. Compared to other central banks, the ECB’s move was belated. Some observers believe further increases are possible. The ECB’s next interest rate meeting is Sept. 8 in Frankfurt am Main. The highest inflation rate in the euro zone is in the Baltic states Energy prices rose 39.7% year on year in July, after a 42% increase in June, according to Eurostat. Non-processed food went up by 11%, and prices for services rose by 3.7%. The highest inflation rate in the euro zone was again recorded in the three Baltic States, at more than 20%. The inflation rate in Germany based on the European standards was 8.5%. DW