Inflation in the bloc of 19 countries that use the euro reached a new high of 10.7% in October, according to preliminary data, released on Monday.
If confirmed by final figures to be issued later in November by Eurostat, it would be the first time a monthly inflation reading crossed above 10% since the Eurozone’s formation, reinforcing fears of an impending recession.
The surge was fueled by energy prices which the statistics office estimated to be 41.9% higher than in the same month last year. Prices for food, alcohol, and tobacco are believed to have risen by 13.1% year-on-year.
Economic powerhouses Germany, France, and Italy were driving price hikes, according to Eurostat. Italy, where the annual inflation rate for October is forecast at 12.8%, recorded the highest monthly increase with a 4% jump. Consumer prices in Germany jumped 11.6% and in France the number reached 7.1%, according to preliminary data.
The Baltic States appeared among the most deeply affected with annual inflation crossing the 20% mark. Estonia leads the pack with a 22.4% estimate.
“The danger that the deterioration of the economic outlook will turn out to be worse than expected, making an excessively rapid step in the normalization of interest rates disproportionate, shouldn’t be underestimated,” Governor of the Bank of Italy, Ignazio Visco, told Bloomberg on Monday.
In an attempt to bring down prices, the European Central Bank (ECB) doubled its key interest rate to 1.5% last week and confirmed further rate hikes in the coming months.
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