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Inflation in the eurozone hit its highest ever level this month, pushed up to 9.1% by soaring energy costs exacerbated by the war in Ukraine.
It is the ninth consecutive month to set a record rate for inflation in Europe, with consumer prices rising steadily since November 2021.
The UK currently has the worst inflation of all the G7 countries, hitting 10.1% in the 12 months to July.
Energy was the main instigator of Europe’s surging inflation, topping an annual inflation rate of 38.3%, according to Eurostat, the statistics authority.
Food, alcohol and tobacco also rose to 10.6%, compared to 9.8% in July.
Within the EU, some countries have already blown past the bloc’s headline inflation rate.
Estonia – one of the poorer countries in the union – has the eurozone’s highest inflation rate at 25.2%, followed by Lithuania at 21.1% and Latvia at 20.8%.
Economists at investment bank Goldman Sachs warned on Tuesday that the UK’s inflation could exceed 22% next year if gas prices are not driven down.
“In a scenario where gas prices remain elevated at current levels, we would expect the price cap to increase by over 80% in January (vs 19% assumed in our baseline),” they said in a research note.
“(This) would imply headline inflation peaking at 22.4%, well above our baseline forecast of 14.8%.”
Last week economists from Citi said consumer price inflation was set to peak at 18.6% in January, more than nine times the Bank of England’s target.
Goldman said it expected a recession to begin in the fourth quarter, with the economy set to contract by 0.6% in 2023 as a whole.
Spain, meanwhile, reported that inflation had potentially started to slow down, falling from 10.7% in July to 10.3% in August.
In July, the euro currency fell to…
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Source : skynews
