Inflation in the Euro-area accelerated as initially estimated in August to a near-decade high, according to data from Eurostat on Friday.
Consumer prices rose 3% in August from 2.2% in July, its highest since November 2011.
With production costs constantly rising, eurozone inflation is expected to rise even further in the months ahead. Economists suspect that by the end of 2022, inflation will be a long way below the European Central Bank’s (ECB) 2% target.
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For now, eurozone price growth may still keep rising with inflation in Germany, the region’s largest economy, running at 15%. Retailers in the 19-nation area plan to hike prices in the next three months. Consumers have, however, already adjusted as they’re less likely to make any major purchases next year.
In France, the inflation rate skipped in August to 2.4%, the highest since 2018. Meanwhile, the pace of price growth in Italy reached 2.6%, the fastest since 2012.
Despite price growth running well above the 2% level the ECB aims to achieve in the medium term, ECB President Christine Lagarde insists that it will slow again next year.
Excluding food, alcohol, energy, and tobacco, the core inflation rate advanced from 0.7% in July to 1.6% in August. As estimated, the harmonized index of consumer prices gained 0.4% in August.
According to the latest ECB staff projections, released early this month, inflation will rise to 2.2% this year before slowing to 1.7% in 2022.
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