Eurozone Inflation Hits 9.1% Record High in August
Inflation hit a new record of 9.1% this month in European countries that use the euro currency. Economists say this is caused by a sharp rise in energy prices due to the Russia-Ukraine war. Annual inflation in the eurozone's 19 countries rose from 8.9% to 9.1% in just one month from July to August, according to the European Union statistics agency Eurostat.
The high demand for food and energy combined with disruptions to supply chains have caused prices to soar. Nearly half of Europe has recently been affected by a drought, which killed off production of essential crops and drove food prices up to 10.6%, according to Eurostat's preliminary estimate.
U.K. consumers face an 80% jump in annual household and energy bills, and inflation in Britain, Denmark and Norway (which have their own currencies) also face surging inflation, per AP News. "Specific European problems continue to push inflation higher," ING Bank senior economist Bert Colijn wrote in an analyst note. "The gas supply crisis and droughts are adding to persisting supply-side pressures on inflation at the moment."
"Inflation continues to hit new records just as the European Central Bank mulls another large interest rate hike for next month," reads an article from CNBC. "The ECB increased interest rates by 50 basis points to zero on July 21—its first rate hike in 11 years—and a similar, or larger, hike is now expected on Sept. 8."