Inflation in the eurozone reached a new high of 8.6 percent in June due to rising energy costs.
The record-breaking figure, up from 8.1 percent in May, portends terrible news for the European economy, which is currently coping with several issues at once: the conflict in Ukraine, diminishing supplies of Russian gas, global food insecurity, disrupted supply chains, and the fallout from China’s strict lockdowns.
With a price increase of 41.9% annually, energy remains the leading cause of high prices as EU nations scramble to find alternatives to cheap Russian fossil resources that are more expensive.
Unprocessed foods like fruits and vegetables are rising sharply (11.1%) due to increasing gas costs, making fertilizers more expensive for farmers and producers.
The agony of inflation, which has never been this high in the history of the single currency, affects every member state of the EU. For politicians, businesses, and consumers alike, the problem has become a very complex and urgent challenge.
With a 10 percent mark, Spain became the first significant member state to experience double-digit inflation, while Germany experienced a slight decline (8.2 percent) from May to June (8.7 percent ).
Malta (6.1%) and France continue to have the lowest inflation rates in the eurozone (6.5 percent ). France is protected from the gas market turbulence because it gets most of its electricity from nuclear power.
Weeks after the European Central Bank (ECB) issued the first interest rate increase in more than a decade to bring down prices, Eurostat released its most recent inflation data.
The numbers from June seem to support ECB President Christine Lagarde’s statement that her organization will keep raising interest rates if the inflation situation worsens.
The 8.6 percent rate recorded last month exceeds the ECB’s 2 percent yearly objective by more than four times.
Source: Laatste Nieuws