London, Europe Brief News – Annual inflation in the eurozone’s 19 countries hit 8.6% in June, surging past the 8.1% recorded in May, according to the latest numbers published Friday by the European Union statistics agency, Eurostat.
Inflation is at its highest level since record-keeping for the euro began in 1997.
Germany surprised many earlier this week when it reported a drop of 0.5 percentage points in inflation month-on-month. Experts said this was due to new government subsidies to ease the impact of higher energy prices and it was not yet the end of surging inflation rates.
But both France and Spain experienced new inflation records in June with the latter surpassing the 10% threshold for the first time since 1985, according to Reuters.
Speaking earlier this week, ECB President Christine Lagarde struck a hawkish tone.
“If the inflation outlook does not improve, we will have sufficient information to move faster,” Lagarde told an audience in Sintra, Portugal, about the period after that September hike.
However, there are growing questions about the future of monetary policy in the euro zone amid fears of a recession in the coming months.
If the central bank were to move quickly in hiking rates, this could hamper economic growth even further at a time when a slowdown is already underway.
