Euro Area Inflation Hits 9.1% – Trustnodes

Inflation in the euro zone has risen to 9.1% according to a flash estimate by Eurostat for August.

“Euro area annual inflation is expected to be 9.1% in August 2022, up from 8.9% in July,” it said.

Energy accounts for the vast majority of it, up 38.3% in August, while food has risen another 10%.

Services however, which account for 416 out of 1,000 in the inflation weight, rose only 3.7%.

Likewise non-energy industrial goods rose 4.5%, making the current inflation rate in many ways very specific to energy.

Estonia, Latvia and Lithuania are the worst hit, all seeing an inflation rate above 20% as the Baltic countries cut off energy relations with Russia.

Germany on the other hand is faring better than most with an inflation rate of 8.8%, while in France it’s at just 6.5%.

France has not raised the cap on energy prices, unlike others, including the United Kingdom, so keeping a lid on inflation.

For August, some of the inflation might also be imported as the euro fell below one dollar. That might start changing in September when the European Central Bank is expected to further raise interest rates.

They have a delicate balance to strike in maintaining good growth after two decades of stagnation for Europe, while also taming inflation.

Alas as the latter seems to be almost entirely energy related, the newly developing gas and oil trade routes might go much further in lowering prices than any rate hikes.

In part due to those developments, including an imminent Iran deal, gas has retreated back to $9, raising hopes we may have seen a double top, while oil fell some 10%, now back to below $90 for WTI crude.