Inflation in Eurozone Rises to Record High of 8.9% in July

Inflation in the eurozone accelerated last month, reaching a new record high. Consumer prices rose by 8.9 percent compared to June of the previous year, according to a new report from Eurostat. This is the highest rate since the introduction of the euro in 1999.

In the previous month of May, consumer prices had risen by 8.6 percent, and experts had anticipated an acceleration to 8.7 percent. Inflation was again driven by energy prices, which rose by 39.7 percent compared to last year. Prices for food and beverages increased from 8.9 to 9.8 percent. 

The three Baltic states once again had the highest inflation rates in the eurozone, exceeding 20 percent. In Germany, inflation stood at 8.5 percent, while in Belgium, inflation in July reached 10.4%, which is 0.1% lower than in June. 

A week ago, the European Central Bank (ECB) raised its key interest rates for the first time in eleven years. Compared to other central banks, the ECB has reacted late, despite its inflation target of two percent being clearly exceeded for quite some time.

At the same time, economic growth across the eurozone was higher than expected at 0.7 percent, versus a forecast of 0.2 percent. Southern Europe delivered a positive surprise, while Germany reported zero growth in the second quarter.