Inflation in the eurozone reached a fresh record high of 8.6 percent in June, ahead of the European Central Bank’s first rate hike in 11 years.
According to preliminary data released on Friday by the European statistics office Eurostat, annual headline inflation for the month of June was at 8.6 percent, up from May’s reading of 8.1 percent, and higher than a prediction of 8.4 percent in a Reuters poll of economists.
The figure shows that the cost of living in eurozone nations is continuing to rise.
Early this week, Germany reported a decrease in inflation of 0.5 percentage points from the previous month, which experts said was due to new government subsidies to lessen the impact of rising energy prices and it was not yet the end of surging inflation rates.
Meanwhile, France and Spain both had new inflation records in June, with Spain topping 10 percent for the first time since 1985.
European Central Bank President Christine Lagarde at the annual conference in Portugal last week tried to ease fears of a eurozone recession, saying that the Bank is ready to raise rates more swifty if inflation continues to rise.
The ECB is scheduled to meet at the end of July to announce a rate hike. The ECB has had negative interest rates since 2014, but has vowed the rates will be raised in September, bringing interest rates to positive territory this year.
Furthermore, manufacturing output in the eurozone fell in June for the first time since the first Covid-19 lockdowns in 2020.
S&P global eurozone manufacturing Purchasing Managers’ Index (PMI) fell to 52.1 in June from May’s 54.6, its lowest since August 2020 but just ahead of a preliminary reading of 52.0.
The eurozone manufacturing economy ended the second quarter on a downbeat note, as production levels declined, according to a survey. This was due to rising pricing and a gloomy economic outlook, which discouraged customers from making purchases.