Eurozone inflation soars to 4.1%, hitting a new 13-year high – .

Eurozone inflation soars to 4.1%, hitting a new 13-year high – .

A crowded bar in the 6th arrondissement of Paris as Parisians embrace the lifting of Covid-19 restrictions as cafes and restaurants across France reopen for the first time in more than 6 months.
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Eurozone inflation hit a new 13-year high in October, as the monetary bloc struggles with soaring energy costs.
Headline inflation stood at 4.1% for this month on Friday, according to preliminary data from the European statistical office Eurostat.

This was the highest level since July 2008, according to Reuters data, and was ahead of a consensus forecast of 3.7%. September’s figure was 3.4%.

The increase was driven above by soaring energy prices, exacerbating the concerns of policymakers. The energy component of inflation data rose 23% year-on-year, by far the biggest contributor.

Third-quarter data released on Friday also showed the bloc’s GDP grew 2.2% from the previous period, its fastest pace in a year.

“The solid increase in euro area GDP in the third quarter means that the recovery phase is almost over in most of the euro area,” said Andrew Kenningham, chief economist for Europe at Capital Economics, in a statement. note.
“Growth will be much slower in the last quarter as supply chain disruption, slowing global demand and some labor shortages hamper production. “

Kenningham added that headline and core euro area inflation are expected to rise further over the next two months.

“Past movements in gas prices indicate a further acceleration in energy inflation, and companies’ expectations for their own selling prices mean that the base rate will also continue to rise,” he said.

Inflation is a key indicator monitored by the European Central Bank. She announced in September that she would buy fewer bonds due to soaring consumer prices.

ECB President Christine Lagarde said on Thursday that rising energy prices, recovering demand and supply bottlenecks are currently pushing inflation up.

“While inflation will take longer to come down than expected, we expect these factors to subside over the next year. We continue to expect inflation over the medium term to remain below our 2% targets, ”she said.

The ECB forecasts inflation at 2.2% in 2021, 1.7% in 2022 and 1.5% in 2023, therefore below its target of 2%. The bank will update these forecasts in early December.

– CNBC’s Silvia Amaro contributed to this article.


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