Canada: Inflation rate in the euro area at ten percent for the first time in two -digit

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ARCHIV: Das Euro-Zeichen vor dem ehemaligen Hauptsitz der Europäischen Zentralbank in Frankfurt, Deutschland © Reuters/Kai Pfaffenbach Archive: The euro sign in front of the former headquarters of the European Central Bank in Frankfurt, Germany

Frankfurt (Reuters) - Inflation in the euro area is driven in September by a massive price boost for energy for the first time.

Consumer prices rose by 10.0 percent within a year, as the Eurostat statistics office announced on Friday based on an initial estimate. This is the highest inflation rate since the euro has been. Experts surveyed by Reuters had only expected 9.7 percent. In August the rate was still 9.1 percent. In Germany, too, inflation broke the threshold of ten percent in September, the largest economy in the euro area.

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With the unexpectedly powerful inflation boost, another Jumbo interest rate step by the European Central Bank (ECB) at the next interest session in October is becoming more and more likely. Most recently, numerous currency keepers had explained that an interest rate increase should be 0.75 percentage points on the agenda. Because the inflation goal of the ECB is now getting more and more into the distance. The inflation rate is now five times as high as the central bank goal of two percent.

"is scary that the increase in inflation becomes rapidly wider," commented Alexander Krüger, chief economist from private bank Hauck Hähhäuser Lampe. The weak euro also drives the increase in inflation. "This increases the pressure on the ECB to lift the key interest rate quickly and vigorously." From the perspective of Commerzbank chief economist Jörg Krämer, the high inflation has meanwhile led more and more citizens to doubt whether the ECB can limit inflation in the long term as promised to two percent. "This degeneration of long -term inflation expectations is dangerous," he noted. "The ECB should quickly raise its deposit rate towards four percent." The key interest rate for the financial markets is currently 0.75 percent. Thomas Gitzel, chief economist of VP Bank, is now expecting a further XXL increase by 0.75 percentage points for the October interest.

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In Germany, inflation according to European measurement (HVPI) in September in the course of the loss of the 9-euro ticket and the tank rabbit rose to 10.9 percent. In the Netherlands it was even higher at 17.1 percent. The three Baltic countries with inflation rates of more than 22 percent recorded the highest inflation rates in the euro area. In France, on the other hand, the price increase was the lowest at 6.2 percent.

Energy prices shoot up

strongest inflation drivers in September were the increasing energy prices as a result of the Ukraine War. Within a year, energy increased by 40.8 percent in September. In August, the climb was still 38.6 percent. The prices for food, alcohol and tobacco climbed 11.8 percent after 10.6 percent in August, which for industrial goods without energy moved 5.6 percent after 5.1 percent in August. Services cost 4.3 percent more.

The ECB is likely to worry that even without the prices for energy and food that is prone to fluctuation, inflation increases unbroken. The so -called core inflation increased to 6.1 percent after 5.5 percent in August. This indicates that the price thrust now increasingly records more areas of the economy. This is not an easy situation for currency authorities, since the economy now cools down noticeably. However, they recently made it clear that the fight against inflation currently has priority over economic considerations. Chief economist Krüger von Hauck Aufhäuser Lampe is certain: "The high core inflation will only be combated with the acceptance of a recession."

(edited by Ralf Bode. If you have any questions, please contact [email protected])

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