According to the European Union’s statistics office Eurostat on Wednesday, Euro area annual inflation is up to 9.9% in September, up from 9.1% in August. The inflation rate in September tapped a 40-year high, and investors suspect that the eurozone is “at risk of a financial meltdown.”
European Union’s Consumer Price Index Taps a 40-Year High, EU Residents Take to the Streets to Protest Scorching Inflation
Europe’s inflation has jumped a great deal since September 2021, according to the recent report published by Eurostat on Wednesday morning. “The euro area annual inflation rate was 9.9% in September 2022, up from 9.1% in August,” Eurostat’s September consumer price index (CPI) update notes. “A year earlier, the rate was 3.4%. European Union annual inflation was 10.9% in September 2022, up from 10.1% in August. A year earlier, the rate was 3.6%,” the government agency’s report details.
The announcement from Eurostat follows the recent inflation report published six days ago by the U.S. Bureau of Labor Statistics on October 13. Inflation in the United States for the month of September was an 8.2% rise in the year through September. The eurozone’s CPI follows the region’s fiat currency the euro struggling to compete with the U.S. dollar. A recent report published by Citi’s FX strategists says that the group of foreign exchange analysts suggest the euro could sink to $0.86 against the greenback if macro turmoil persists.
Reports indicate that the cost of bread is skyrocketing in Europe as the elevated cost of electricity, eggs, and flour has pushed bakers to increase bread prices across the board. The New York Times details that 1 in 10 Belgian bakeries have shut down shop over the rising inflation levels eating away at their businesses. Some accounts say that the inflation has been so bad that residents in Paris have taken to the streets by the thousands to criticize the rising prices.
The economist from the Vienna Institute for International Economic Studies, Philipp Heimberger, notes that while inflation is wreaking havoc globally, Europe is facing the worst of it. “Across the globe, inflation is primarily driven by energy prices and (energy-intensive) food prices in the context of supply chain issues,” Heimberger tweeted on Wednesday. Heimberger further added:
The impact of supply factors in Europe is particularly strong.
Some observers have blamed the United States for allegedly being involved with the Nord Stream sabotage, which has caused Europe’s energy inflation to rise even higher. Reports further note that in addition to Paris, France, protestors have reportedly gathered in Germany, Austria, and Greece as well, to protest the red-hot inflation levels scouring the eurozone.
Inflation in Germany, for example, has reached a massive harmonized rate at 10.9%, tapping a 25-year high in the country. The eurozone’s inflation is so bad today, that global firms located in the region are starting to relocate “eastward in Europe in search of cost savings.” On the first of October, the Telegraph reported that market analysts believe the eurozone is at “risk of [a] financial meltdown” due to “surging inflation and higher rates.”
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