Prices in the eurozone rose by 8.9 percent in July compared to last year, the Eurostat statistics agency reported on the basis of an initial estimate. This inflation figure is another record breaking. The figures show that the currency depreciation in July increased most rapidly in the Netherlands.
The statistical office reports the figures via the European harmonized measurement method (HCIP). This method of calculation was created to be able to compare the inflation figures of different euro countries.
As in the Netherlands, inflation in the euro area is being driven by sky-high energy prices. Compared to July last year, they rose by 39 percent, slightly less than last month. The prices of processed food and services also increased.
Within the eurozone, inflation is highest in the Baltic States, led by Estonia at 22.7 percent. In Latvia and Lithuania it is 21 and 20.8 percent respectively. These countries are very dependent on Russian gas. Prices rose the least in Malta: 6.5 percent.
Prices in our country rose by 11.6 percent compared to last year, 1.7 percentage points more than in June. According to Eurostat, this inflation rate is the highest in the entire euro area.
To ensure that price increases cool down somewhat, central banks around the world are raising interest rates. The European Central Bank (ECB) did this last week with a hefty interest rate step of 0.5 percentage point. The purpose of this is to make borrowing more expensive and saving more attractive, thus slowing down the economy.