Higher food and fuel prices drove euro zone inflation to a record high annual rate of 45 in June. Consumer prices in the region rose 0.4% month-on-month the European Union’s statistics office Eurostat said, confirming its estimate of two weeks ago. The figures were in line with expectations and economists predicted that things will get worse before they get better.
Energy prices rocketed 16% year-on-year in June and were up 2.5% from the previous month. That after oil costs that month rose to then-new highs above $140 a barrel.
The new inflation figure is more than double the European Central Bank’s target. The ECB raised interest rates by a 0.25% to 4.25% this month to try to curb prices. The ECB’s decisions are made more difficult by slowing economic growth, which will eventually ease the upward pressure on prices.