Inflation in eurozone hits record 8.6% as Ukraine war continues
Inflation across the eurozone has soared to a fresh record of 8.6% in June as Russia’s war in Ukraine adds to the cost of living crisis.
Figures from the EU statistics agency Eurostat showed consumer price inflation increased from 8.1% in May, reaching the highest level since relevant records began in 1997, two years before the euro was launched.
Adding to pressure on the European Central Bank as it plans for the first rise in interest rates for 11 years later this month, the latest snapshot showed energy prices rose at an annual rate of almost 42% in June, compared with 39% in May.
Alastair George, chief investment strategist at the financial research firm Edison Group, said: “It may be a difficult day in the office for ECB policymakers, with annual inflation at 8.6% more than four times the 2% target – but it is even more difficult for low-income consumers facing 40% increases in energy prices.”
Heaping pressure on households across the 19-member single-currency bloc, the inflationary surge comes as the Russian war in Ukraine drives up wholesale oil and gas prices across the continent.
Households are also facing a sharp rise in the price of food, alcohol and tobacco, with an almost 9% annual inflation rate. The price of non-energy industrial goods rose by 4.3% on the year, up from an annual rate of 4.2% in May, while services inflation cooled slightly from 3.5% in May to 3.4% in June.
The world’s biggest economies are facing the highest rates of inflation for 40 years as the fallout from the coronavirus pandemic disrupts global supply chains and Vladimir Putin’s invasion of Ukraine drives up energy costs, putting pressure on central banks to raise interest rates.
This week the leaders of the US Federal Reserve, the ECB and
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