Eurozone consumer inflation hits 10-year high

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Consumer inflation in the 19 countries that share the euro accelerated to 3% this month

A inflation on euro area jumped to a ten-year high this month and is expected to go further ahead, challenging the European Central Bank’s benign view of rising prices and its stance of looking beyond what it considers a transitory rise.

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Consumer inflation in the 19 euro-shared countries has accelerated to 3% this month, from 2.2% in July, above expectations for a 2.7% rise and far short of the ECB’s 2% target.

The jump was driven by energy costs, but food prices also rose, while there were unusually sharp increases in industrial goods prices, according to Eurostat, the European Union’s statistics agency.

Markets generally shrugged off the data, suggesting that the central bank’s narrative of temporary inflation and expansionary monetary policy over the next few years remains the mainstay among investors.

Still, the numbers are likely to be uncomfortable reading for the ECB.

The central bank has repeatedly raised its inflation forecast for this year just to make the actual numbers beat its estimates, and now it looks like price growth will only peak in November.

With inflation in Germany — the eurozone’s biggest economy and the ECB’s biggest critic — expected to approach 5% in the coming months, the central bank could come under increasing public pressure to deal with price developments, which they are reliving long-dormant memories of soaring prices.

The ECB argues that a number of one-off factors, including production bottlenecks related to the reopening of the economy after the Covid-19 pandemic, are responsible for most of the rise in inflation, and that price growth will quickly moderate at the start of the year. next year.

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palheta smll Eurozone consumer inflation hits 10-year high

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