Eurozone inflation hits record high of 10.7% – recession risks spreading
Euro area annual inflation is expected to be 10.7% in October 2022, up from 9.9% in September, according to a flash estimate from Eurostat, the statistical office of the European Union.
Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in October (41.9%, compared with 40.7% in September), followed by food, alcohol & tobacco (13.1%, compared with 11.8% in September), non-energy industrial goods (6.0%, compared with 5.5% in September) and services (4.4%, compared with 4.3% in September).1
The 10.7% inflation rate for the month of October represents the highest-ever reading since the formation of eurozone.
“Inflation surged again in October and are a proper Halloween nightmare for the European Central Bank (ECB),” analysts at Pantheon Macroeconomics told CNBC.2
Salomon Fiedler, an economist at Berenberg, said the “continuing surge in consumer prices and still-resilient domestic demand in the summer indicate a risk that the ECB may hike rates by 75 basis points in December, rather than the 50 basis points we currently expect.”
“Recession risks are spreading,” Spanish central bank Governor Pablo Hernandez De Cos said today.3
“Decisive action by us in the current juncture will support medium-term growth, by reducing inflationary pressures and avoiding a de-anchoring of inflation expectations.”
References:
1 Euro area annual inflation up to 10.7% – Flash estimate – October 2022 – eurostat – October 31, 2022
2 Euro zone inflation hits record high of 10.7% as growth slows sharply – CNBC – October 31, 2022
3 Euro-Zone Inflation Soars to New Record as Economy Fades – Bloomberg – October 31, 2022
Featured image credit: eurostat
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