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Eurozone inflation jumps to record-high 10.7%

October 31, 2022

The increase outpaced the predictions from economists. The European Central Bank hinted that another interest rate hike was likely on the horizon.

The European Cental Bank in Frankfurt
Millions in the eurozone may slip into poverty as a recession looms, economists have warnedImage: Christoph Hardt/Geisler-Fotopress/picture alliance

Inflation reached 10.7% across the 19 countries that use the euro currency, a 40-year high.

Economists had previously forecast that inflation would top out at about 10.2%.

The inflation figure rose from 9.9% the month before, driven by an astronomical 41.9% rise in energy costs compared to last year, EU statistics office Eurostat said. Major increases in the cost of food were also a factor, rising at 13.1%.

Economic powerhouses Germany, France, and Italy were driving price increases the most, according to Eurostat.

At the same time, the economy grew ever so slightly in the third quarter, with Germany showing 0.3% growth instead of the predicted financial contraction.

Who can afford the soaring gas prices?

Another rate hike imminent

The European Central Bank (ECB) has raised rates a combined 200 basis points in the past three months in an effort to combat inflation as ordinary people and businesses begin to feel the crunch.

Further hikes are anticipated as early as December, the ECB has hinted. However, rate increases are likely to slowdown thereafter due to the likelihood of a looming recession and slowly decreasing gas prices.

Supply chain issues due to the pandemic and the economic fallout from Russia's invasion of Ukraine have been the main forces behind soaring inflation globally since early 2022.

es/ar (AP, AFP, Reuters)