It appears European consumers’ wallets won’t be getting a break anytime soon.
Prices across the EU soared 10.9% year-over-year last month, marking yet another record-breaking high thanks to perpetually skyrocketing food and energy costs. In August, annual inflation stood at 10.1% and a now-seemingly minuscule 3.6% in September 2021. The Eurozone, which is comprised of 19 countries using the euro currency, saw prices rise 9.9% from one year ago, up from August’s 9.1%.
The majority of last month’s jaw-dropping price growth was due to out-of-control food and energy costs, with the latter soaring 40.7% from one year ago. The spiralling price pressures are adding to the urgency of further rate hikes from the European Central Bank, which already raised borrowing costs in July and September.
However, the ECB’s job will likely become a lot more complicated, because the European Commission on Tuesday unveiled a €40 billion aid package to help small and medium-sized businesses and poverty-stricken households alleviate financial strain from soaring energy prices. Similarly, Germany, the largest economy in the EU, proposed a €200 billion plan complete with energy price relief measures including a price cap on gas and a windfall profit tax on energy companies.
Information for this briefing was found via Eurostat. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.