The eurozone registers the first double-digit inflation in history — RT Business News

The eurozone registers the first double-digit inflation in history

Consumer prices in the Eurozone saw a whopping 10% year-on-year growth in September, marking a new record that is mounting pressure on the European Central Bank (ECB) to aggressively tighten monetary policy.

Inflation across the euro area rose from August’s 9.1% reading, Eurostat data showed on Friday, beating the median forecast of 9.7% and marking the fifth consecutive month of price growth to exceed analysts’ forecasts.

Inflation continues to be driven by spiraling food and energy costs. Energy prices, which rose at an annual rate of 41% in September, were the main contributors to rising inflation in the 19 countries that use the euro. Meanwhile, unprocessed food prices rose 13%.

Excluding volatile food and energy prices, inflation still soared to 6.1% from 5.5% in August, while an even narrower measure that also excludes alcohol and tobacco rose to 4.8. % from 4.3%.

Estonia, Lithuania and Latvia recorded inflation rates above 22%. The figure for the Netherlands came to 17.1%, down from 14% in August. Slovakia’s 13.6% reading also placed it in the group of those with above-average price growth.

Earlier this week, Germany reported 10.9% year-on-year growth in September, down from 8.8% in the previous month. High food and energy prices were also to blame for the increase.

The worrying inflation readings add to the urgency of more rate hikes, even after the aggressive measures adopted by the ECB in July and September. After today’s inflation reading, calls for another big move at the next ECB meeting scheduled for October 27 are likely to rise.

Investors now see the 0.75% deposit rate rising to around 2% by the end of the year, then around 3% next spring before leveling off.

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