Eurostat confirms advance data from two weeks ago and market expects higher rate of rate hikes
There is no ceiling. The rise in prices continues to put pressure on consumers’ wallets and is not an exclusive situation in Spain. As confirmed on Friday by Eurostat, the statistical office of the European Commission, inflation in the eurozone reached a record 9.1% in August, two tenths more than in July.
The data, confirming the initial estimate two weeks ago, bolsters the idea that the European Central Bank (ECB) could be even more aggressive in raising interest rates to combat runaway inflation, despite move could hinder economic recovery.
The big question is whether they will succeed in their goal. Eurozone price gains intensified in August, despite the year-on-year rise in energy prices slowing to 38.6%, one point less than in July. But this data was upwardly offset by the rise in the price of processed food, alcohol and tobacco, which stood at 10.5% in August, up from 9.4% in July.
For their part, services became 3.8% more expensive, one-tenth more than the annual rate in July, while non-energy industrial goods price increases accelerated by six-tenths to 5.1%.
Excluding the impact of energy, annual inflation in the eurozone was 5.8% in August, compared to 5.4% in the previous month, while the effect of fresh food, alcohol and tobacco core inflation reached a record 4.3%, three tenths more than in July.
This data, that of the underlying, is of most concern to the ECB, which is also several steps behind the Federal Reserve (Fed) in the pace of monetary tightening. At its last meeting, the agency surprised with a record 75 basis point rise in interest rates. And after the last known data, many voices already point to a similar movement in October.
Especially since the ECB has set itself the goal of protecting the euro in addition to inflation. The single currency has lost much of its value against the dollar, which has gained strength this year, benefiting from higher interest rate hikes in the US. in something common in recent weeks.
The problem is that the Fed keeps pushing the accelerator. And there are already analysis houses suggesting that September’s rate hike will not be 75 basis points, but 100. A historic move that would undoubtedly put more pressure on the ECB.
According to data collected by Eurostat, the largest price increases were recorded in Estonia (+25.2%), Latvia (+21.4%) and Lithuania (+21.1%), while the smallest increases were recorded in France (+6. 6%), Malta (+7%) and Finland (+7.9%).
Of the 27 countries that make up the European Union, 15 recorded double-digit inflation in August.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
