Another record: Consumer prices rose again in October, inflation climbed to a record 10.6 percent – not only because of the higher energy prices.
Inflation in the eurozone hit another record high in October. Compared to the same month last year, consumer prices rose by 10.6 percent, according to a second estimate from the statistical office Eurostat in Luxembourg. It is the highest rate in the currency area’s history. The inflation rate determined in the first estimate was corrected slightly downwards by 0.1 points.
Inflation was again driven by energy prices, which rose by 41.5 percent compared to the same month last year. In addition, the rise in prices for food and beverages accelerated from 11.8 percent in September to 13.1 percent in October. The prices of industrial goods also rose more sharply. Core inflation, which excludes goods that are particularly volatile in price, such as energy and food, rose from 4.8 to 5.0 percent. Core inflation is considered by economists to be decisive for fundamental price developments.
Different inflation rates
The inflation rates in the currency area are still very different. The Baltic states of Estonia, Latvia and Lithuania have the highest currency depreciation, each with more than 20 percent. France, Spain and Malta are at the other end of the scale with inflation rates below 8 percent in October. With inflation of 11.6 percent according to European figures, Germany is in the middle.
The inflation target of the European Central Bank (ECB) of two percent has been clearly exceeded for a long time. After some hesitation, the ECB has meanwhile raised its key interest rate significantly in response to the price shock. It is questionable whether it will maintain the high rate of tightening of 0.75 percentage points recently. Voices are growing on the financial markets that expect tightening to slow down soon. One reason is the strong economic headwind that the currency area is feeling because of the Ukraine war.