Inflation in the euro zone continues to rise and reaches a new record, driven by food and energy

Last July, inflation was 8,9% in the euro zone states, as announced this Wednesday (31) by the European Statistics Office Eurostat. It was the highest percentage ever recorded since the agency began measuring inflation, which began in January 1997. (ValorInvest)

High history

The rise in inflation has occurred since November 2021 and is already putting strong pressure on the euro zone's monetary authority, the European Central Bank (ECB). There is an ECB meeting scheduled for September 8th, at which the central interest rate is expected to increase, after a timid step in that direction in July (from 0,0 to 0,5%). 

Measures to contain the crisis

In a message to the press, the president of the Bundesbank (German Central Bank), Joachim Nagel, expressed the urgency for the ECB to “act decisively”, adding that, otherwise, inflation expectations could “permanently settle above our target of 2%”. 

“We need a sharp increase in interest rates in September. And more interest rate moves are expected in the coming months,” the official added.

Energy

Of the components of inflation, energy registered an increase of 38,3%. Although it was the main factor in the August result, it represents a small setback compared to July, when it recorded 39,5%.

The entire European Union (EU) is facing a serious crisis in the energy sector due to the explosive increase in the price of electricity for consumers.

The scenario is explained by the drastic reduction in gas deliveries from Russia to European countries, in response to sanctions adopted by the EU due to Russian military operations in Ukraine.

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Food

The food sector (which is measured together with tobacco and alcohol) experienced an increase of 10,6% in August, compared to 9,8% in the previous month.

The conflict between Ukrainians and Russians impacts the food security of eurozone countries, as Ukraine's ability to export its grains and cereals has been drastically limited.

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• Eurozone annual CPI hits new record of 9,1% in August (Exam)
• Portugal has inflation of 9%, the first slowdown in almost a year; in the Euro Zone, the index is at a record (The globe) (I.e.

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(With AFP)