Inflation in the eurozone reaches new record high of 8.6%

Hovering vitality costs have pushed inflation throughout the eurozone to a brand new excessive of 8.6% in June.

The record-breaking determine, up from 8.1% in Might, spells dangerous information for the European financial system, which is at the moment coping with a number of challenges on the identical time: the battle in Ukraine, dwindling provides of Russian fuel, international meals insecurity, disrupted provide chains and the ripple results from stringent lockdowns in China.

Vitality continues to be the primary driver of pricey costs, with a 41.9% value on an annual foundation, as EU international locations rush to exchange low cost Russian fossil fuels with different, high-priced suppliers.

Unprocessed meals, like greens and fruit, are additionally experiencing a marked enhance (11.1%) as excessive fuel costs flip fertilisers costlier for farmers and producers.

No EU nation is spared from the pains of inflation, which has by no means been been so excessive within the historical past of the one forex. The phenomenon has turn into a particularly urgent and complex problem for policymakers, corporations and customers.

The Baltic international locations stay significantly affected by the upward pattern in costs -- Estonia (22%), Lithuania (20.5%) and Latvia (19%) -- resulting from their heavy reliance on international imports to satisfy their vitality wants.

Spain turns into the primary large member state to file double-digit inflation, with a ten% mark, whereas Germany noticed a small lower in June (8.2%) in comparison with Might (8.7%).

The eurozone international locations with the bottom inflation numbers are nonetheless Malta (6.1%) and France (6.5%). France obtains most of its electrical energy from nuclear energy, shielding the nation from the volatility of fuel markets.

The newest inflation studying from Eurostat comes weeks after the European Central Financial institution (ECB) introduced the primary hike of rates of interest in additional than a decade with the objective of bringing down costs.

ECB President Christine Lagarde mentioned her establishment will proceed to lift rates of interest if the inflation scenario deteriorates, one thing June's knowledge seems to substantiate.

The 8.6% determine registered final month is greater than 4 instances the two% annual goal set by the ECB.