Inflation above 10% in more than half of the EU puts the European Central Bank on alert & More Latest News Here – Up Jobs

The evolution it is conspicuous. Only a year ago, inflation in the EU stood at 2.5%, seven points less than now. It is due, above all, to the rise in energy prices, which currently costs 39.6% more than in July last year, and fresh food, 11.1% more expensive than in 2021. But what All products have become more expensive, as can be seen in the rise in core inflation (which excludes energy products and fresh food), which shot up to 5.1% in July, also marking its record level in the EU. Services rose 3.7% and the prices of non-energy industrial goods rose 4.5%.

And although average inflation in the EU is -nearly- double digits, more than half of the countries that make up the EU exceed this 10%. Thus, a total of 16 countries of the 27 that make up the Union posted double-digit increases in the month of July. The highest rates were recorded in Estonia (23.2%), Latvia (21.3%) and Lithuania (20.9%). And seven other eurozone member countries also saw their inflation exceed double figures: Slovakia (12.8%), Slovenia (11.7%), the Netherlands (11.6%), Greece (11.3%) , Spain (10.7%), Cyprus (10.6%) and Belgium (10.4%). The least intense increases in prices were registered in France, Malta (both 6.8%) and Finland (8%).

In the case of Spainthe harmonized inflation rate stood at 10.7% in July, compared to 10% in June, widening the gap with respect to the EU average price by almost one point and even more so with the eurozone, where it separates them nearly two percentage points.

And it is that the rate of inflation of the Euro zone stood at 8.9% in July, three tenths more than the previous month, which represents the highest increase in prices in the region in the entire historical series and more than four times the price stability goal of 2% of the European Central Bank (ECB). To try to stop this evolution, the body decided at its last meeting held in July to raise interest rates by 50 basis points, in its first rise in the price of money since 2011, in addition to warning that it will undertake more increases in future meetings.

The skyrocketing inflation scares the International organizations. Yesterday the German representative on the board of the ECB, Isabel Schnabel, confirmed that the eurozone could enter a technical recession (two consecutive quarters with economic growth below zero) due to inflationary pressures. “I wouldn’t rule out a technical recession, especially if Russia’s energy supply is further disrupted,” the economist warned in an interview with Reuters.

He pointed out that the ‘shock’ in energy prices is “too big” to offset the ability to adapt that the European economy is showing. Still, he said the expected deterioration in activity in the eurozone does not indicate a “prolonged and deep recession” as occurred in the 2008 crisis.

NEW INCREASE IN RATES

The economist does not rule out the possibility of raising interest rates either. another 50 basis points in September because the levels of concern about rising inflation have not eased at the ECB. He noted that strong inflationary pressures are likely to continue for some time and will not go away quickly. “Even with the normalization of monetary policy underway, it will take some time until inflation returns to 2%,” he acknowledged, adding that it cannot be excluded that in the short term inflation will rise further. Instead, members of the US Federal Reserve (Fed) are considering slowing the pace of rate hikes to assess the consequences on economic activity and inflation itself, according to the minutes of the federal committee. The organization raised its benchmark interest rate by 75 basis points at its July meeting for the second consecutive month, marking the fastest rate of adjustment since the early 1980s.