Eurozone inflation hit a new all-time high in August, according to flash figures from Europe’s statistics office Eurostat
The rate which is above expectation strengthens the case for the European Central Bank to consider a jumbo interest-rate hike when it meets next week.
Inflation in the bloc jumped 9.1% from a year ago in August, led by soaring energy and food prices. Headline inflation in the eurozone hit 8.9% (year-on-year) in July.
This is the quickest price rise since the euro was introduced more than two decades ago.
Energy had the highest annual inflation rate at 38.3%, Eurostat said Wednesday, down slightly from 39.6% in July. Food, alcohol and tobacco were up 10.6% compared to 9.8% in July,
Policymakers are seeking a balance; rate hikes to tamper inflation but not so much that it will stifle economic growth amid fears of a Russian energy cutoff this winter.
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“There’s an urgent need for the Governing Council to act decisively at its next meeting to combat inflation,” Bundesbank chief Joachim Nagel said after Wednesday’s numbers. “We need a strong rise in interest rates in September. And further interest rate steps are to be expected in the following months.”
On Wednesday, Russia halted gas flows through a key pipeline for temporary maintenance.
Governments in the effort to offset the energy-price shock have spent about 280 billion euros ($279 billion), through a myriad of measures including tax cuts, direct payouts to households and subsidies for companies, according to Bloomberg.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
