Eurozone inflation jumps to record 10% in September

AFP , Friday 30 Sep 2022

Eurozone consumer prices skyrocketed by a record 10 percent in September, official data showed on Friday, as inflation reached double digits on the back of soaring energy prices caused by Russia's war on Ukraine.

FILE - A cashier changes a 50 Euro banknote with US dollars at an exchange counter in Rome, Wednesday, July 13, 2022. Inflation in 19 European countries using the euro currency hits another record at 10 as energy prices soar.AP

Stoked by a staggering 40.8 percent rise in energy prices, the yearly inflation rate in the 19-country single currency area hit its highest level since records began, according to Eurostat.

The historic level of inflation will encourage the European Central Bank to stay on its current path of rate hikes, in an effort to cool prices despite the risk of triggering economic recession in Europe.

The leap to 10 percent followed a 9.1 percent rise in August and doused hopes that inflation would begin to ease as energy markets stabilise seven months after Russia launched its war.

Making matters more complicated for policymakers, the eurozone's powerhouse economies showed widely divergent inflation rates, with Germany seeing price hikes of 10.8 percent and France at 6.2 percent.

This may raise questions over whether the ECB should go ahead with another hefty rate hike of 0.75 percentage points at its next meeting on October 27.

Energy prices in Europe remain under intense pressure with Russia starving the continent of gas supply as winter approaches.