Inflation Rate Rises to 10.7% in Eurozone, Highest Since 1991

Inflation for the month of October in the Eurozone reached an all-time high of 10.7 percent from 9.9 percent in September 2022, data from Europe’s Statistics Office has shown.

Influenced by the Russian invasion of Ukraine in February 2022, the price of food and energy has risen astronomically since then, pushing the cost of living in the region to a record high.

Consumer prices was 4.1 percent 12 months ago despite COVID-19. However, Russia-Ukraine crisis bolstered energy and other commodity prices in the region as the European Central Bank (ECB) continues to cut crude oil importation from Russia in protest of Ukraine’s invasion. 

A list of countries in the Eurozone includes Germany, France, Italy, Greece, Austria, Belgium, Luxemburg, and Cyprus among others.

According to the data released on Monday morning, more than half of the countries that make up the Eurozone have reported double-digit headline inflation rates, Investors king learnt. 

For example, Germany’s inflation currently stands at 11.6 percent while inflation in Italy rose to 12.8 percent in October. Inflation in the Netherlands is as high as 16.8 percent while Slovakia has an inflation rate of 14.5 percent. 

The narration is even more drastic in Latvia and Lithuania with 22.4 percent and 22.5 percent inflation rates respectively. 

Analysts have noted that the high cost of food and energy are the major drivers of the current inflation trend in the Eurozone. 

The cost of energy in the Eurozone rose to 41.9 percent in October while food inflation in the zone now stands at 13.1 percent from 11.8 percent in September 2022.

Data indicated that countries with significant reliance on Russian gas and fuel are the worst hit in the Eurozone. 

Meanwhile, the European Central bank (ECB) has hinted about its intention to further hike interest rates in its bid to control inflation. The continental bank noted in a statement that it has made reasonable progress in its effort to normalise inflation rate in the region. 

The bank however stated that it “expects to hike interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target.”

In September 2022, European Central Bank raised interest rates by 75 basis points to take the zone out of the danger of recession.