European Countries Under Pressure as Inflation Soars Up

• The increase in food costs accelerated to 3.2% from November’s rate of 2.2%.
• France, Italy, and Spain this week registered new all-time highs in the inflation rates.

Eurozone inflation climbed to a new level, consumer prices increased 8.6% from a year earlier in June, up from 8.1% in May, pushed once more by rising food and energy prices, according to data released by Eurostat on Friday. 

Pressure on Eurozone

Eurostat, the EU’s statistics agency data shows that inflation in the 19 countries which use the euro currency reached its highest level ever, the increase was mostly caused by rising food and energy prices. 

Consumer prices in the eurozone, which is made up of European Union economies like France and Germany, increased 5% in December over the previous year. Prices for food, alcohol, and tobacco surged 8.9%, while energy prices soared 41.9%, both faster rises than the previous month.

Energy costs increased by 26% over the past year, though significantly less than in the previous month. The increase in food costs accelerated to 3.2% from November’s rate of 2.2%, and the price of goods increased at a quicker rate of 2.9%.

The numbers show that consumers and businesses are under increasing pressure throughout the 19-member currency union, where France, Italy, and Spain this week registered new all-time highs. 

The European Central Bank intends to raise interest rates for the first time in 11 years this month to tackle rising consumer prices. The Ukraine war, Covid after effect, and the restrictions imposed by the federal banks can have a significant impact on the world economy.