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 bad news for the European economy, which is currently coping with a number of 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% on an annual basis, energy remains the main 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%) as a result of increasing gas costs, which make 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 evolved into a very complex and urgent challenge.
Due to their extensive reliance on imports to meet their energy demands, the Baltic countries of Estonia (22%), Lithuania (20.5%), and Latvia (19%) continue to be disproportionately impacted by the increasing trend in costs.
With a 10 percent mark, Spain becomes the first major 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 turbulence of the gas markets because it gets the majority of its electricity from nuclear power.
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Weeks after the European Central Bank (ECB) issued the first interest rate increase in more than a decade with the intention of bringing 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.