Eurozone inflation hits new record of 8.6%

Soaring energy prices are the main driver behind inflation

editor: REMIX NEWS
author: Napi Gazdaság
FILE - A customer pays for vegetables at the Maravillas market in Madrid, on May 12, 2022. (AP Photo/Manu Fernandez, File)

The annual inflation rate across the eurozone rose to a new record of 8.6 percent in June, according to a Eurostat report published on Friday.

Inflation rose from 8.1 percent in May and was higher than the market expectation of 8.4 percent.

There is no June data on the Hungarian inflation level yet, but in May, the level of consumer price increases was already 10.7 percent, and core inflation stood at 12.1 percent.

The growth rate in prices accelerated in energy (41.9 percent, compared to 39.1 percent in May); food, alcohol and tobacco (8.9 percent, compared to 7.5 percent in May), and non-energy industrial products (4.3 percent, compared to 4.2 percent in May). In the service sector, however, the rate of price increase moderated slightly to 3.4 percent from 3.5 percent in May.

Inflation excluding energy prices also rose from 4.6 percent to 5.0 percent, but core inflation, which does not include the price of energy, food, and leisure items, decreased from 3.8 percent to 3.7 percent.

Meanwhile, consumer prices rose by 0.8 percent versus the previous month,, the same as in May.

Compared to the previous year, inflation accelerated by 22 percent in Estonia and 20.5 percent in Lithuania, while Eurostat issued an estimate of 19 percent for Latvia. The lowest inflation was in Malta (6.1 percent) and France (6.5 percent).

Analysts expect the European Central Bank (ECB) to only enact a modest, 25-basis point interest rate hike at its next meeting, mainly because the aforementioned core inflation was relatively low.

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