Daily Management Review

Inflation in the eurozone hits 10-year high


Inflation in the euro zone has reached a ten-year high - according to preliminary estimates, it has accelerated to 3%. The previous day Germany reported its highest inflation since 2008.

Inflation in the euro zone will reach 3% in August compared to the same month in 2020, the Eurostat, the European Commission's statistical office, said on August 31. Inflation accelerated compared to July, when it was estimated at 2.2% year-on-year.

Energy prices rose the most in August, up 15.4 percent from 14.3 percent in July. Manufactured goods rose 2.7% (0.7% in July) and food, alcohol and tobacco gained 2% (1.6% in July). Inflation in the 19 countries using the euro rose to its highest level in 10 years, Reuters noted. The result was well above the 2.7 per cent forecast and the European Central Bank's target of 2 per cent. According to the agency, the rate of price increases will not peak until November.

The day before, Germany reported that its inflation rate in August reached the highest level since 2008. There consumer prices rose 3.4% compared with the same month in 2020. On the same day Spain reported a 3.4% rise in the cost of goods. On 31 August France reported its highest inflation in almost three years.

The European Central Bank is expected to meet on 9 September. So far, its leadership has not reached a consensus on when to start winding down stimulus programs, according to CNBC. Higher inflation figures in August are likely to add to pressure on euro zone central bank governors, the channel said. Philip Lane, the ECB's lead economist, says inflation is temporary as wage growth remains subdued, which is necessary for price stability, Reuters added.

source: cnbc.com