Eurozone inflation rate rises to match UK’s levels at 10%, spurred on by cost of energy reforms

eurozone inflation rate rises to match uks levels at 10 spurred on by cost of energy reforms

Eurozone inflation zoomed past forecasts to hit 10 per cent in September, a new record high that will add to expectations for another large interest rate hike from the European Central Bank (ECB) next month.

It brings the continent into line with the UK, where inflation reached 9.9 per cent in September, down slightly from 10.1 per cent in July.

In the 19 countries that share the euro price rises accelerated from 9.1 per cent in August to 10 per cent in September, data from Eurostat show.

That outstripped predictions for a reading of 9.7 per cent, according to economists, and comes as some eurozone members experience the fastest price growth since the time of the Korean War 70 years ago.

On Thursday, German ministers said that inflation had hit a 71-year high of 9.1 per cent in September. French inflation, meanwhile, slowed unexpectedly to 6.2 per cent last month, down from 6.6 per cent.

Inflation was still driven mainly by volatile energy and food prices, exacerbated by Russia’s invasion of Ukraine, but continued to broaden out, with virtually all sectors now showing high readings.

It is likely to prompt the ECB into further rates rises to curb the impact of rising prices. Like the Bank of England, the ECB is tasked with keeping inflation under a target of 2 per cent.

“The September reading is ugly across the board with all categories experiencing accelerating inflation,” ING economist Bert Colijn said. “This seals the deal on another 75 basis point hike from the ECB in October.”

Underlying inflation also jumped to a fresh high, adding to calls for more rate hikes after large moves in July and September.

More from World

Excluding food and fuel, inflation rose to 6.1 per cent from 5.5 per cent, while under a narrower measure, which excludes alcohol and tobacco, it rose to 4.8 per cent.

Energy prices are up 41 per cent compared to a year ago. Unprocessed food was up 13 per cent.
Even though the ECB’s next meeting is still a month away, markets have priced in the central banking rate rising to around 2 per cent by the end of the year, and potentially up to around 3 per cent in early 2023.

“Headline inflation in double digits and an increasingly alarming surge in core rates leaves the ECB no option other than to continue to jack up policy rates,” said Ken Wattret at S&P Global Market Intelligence. “It cannot afford to disappoint.”

Inews.. .

Don’t Miss Out On The Latest Happening >>> More Gist  @ >>   HypeGist
READ ALSO;   Black Lives Matter leader comes out in defence of Actor, Jussie Smollett as he awaits the verdict in his trial on allegations of faking a hate crime.

Leave a Reply

Your email address will not be published. Required fields are marked *