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Inflation Hits Record 8.9% in Europe

Inflation in the European countries using the euro currency shot to another record in July 2022, which is pushed by higher energy prices, but the economy has managed better growth in the second quarter of 2022.

The annual inflation in the 19 countries of eurozone increased to 8.9 percent in July 2022, which is an increase from 8.6 percent in June. For months, inflation has been running at its highest levels since 1997, leading the European Central Bank to increase the interest rates for the first time in 11 years to tamp down the prices.

Analysts said the economic growth tied to a rebound in tourism can be the last glimmer of upbeat news, with rising interest rates, inflation and a worsening energy crisis fuelled by the Ukraine-Russia war expected to push the euro area into recession in 2022.

Andrew Kenningham, chief Europe economist for Capital Economics, said this is as likely to be as good as it is going to get for the Eurozone for the Eurozone for the future. The growth has also stagnated in Germany, traditional economic engine of Europe, after Germany was hit with a series of cuts in natural gas of Russia used for industry.

Meanwhile, energy prices has surged in the Eurozone by 39.7 percent, and is slightly lower than June 2022, because of gas supply concerns. the prices for food, tobacco, and alcohol has been increased by 9.8 percent, which is faster than the increase posted in June 2022 because of high transport costs, uncertainty, and shortages across supply in Ukraine.