BRUSSELS: 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.
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 ECB is desperate to prevent inflation from taking root in the economy and is taking measures that will reduce demand and could therefore slow growth.
The ECB argues that the hikes are also necessary to put monetary policy on a more “neutral” footing after many years of negative rates and stimulus programmes that pumped tens of billions of euros into the eurozone economy.
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 invasion of Ukraine.
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.
In the Netherlands inflation prices rose by 17.1 percent, the highest since World War II, in a major leap from an already sky-high 12 percent a month earlier.
Also muddying the waters, some eurozone countries are pushing through major national spending to ease the energy price burden on consumers, creating further fragmentation in the European economy.
In an urgent effort to tame prices, European Union energy ministers on Friday agreed to cut peak-hour power consumption and impose windfall levies on energy companies.