In the previous days, Germany had been a beacon, in which inflation rose for the third month in a row against all estimates to 11.6%.
By Chrysostomos Tsoufis
The fears of the most pessimistic have unfortunately been confirmed, and the Eurozone for the first time in its history reaches a double-digit inflation rate for October with Eurostat announcing in its preliminary data 10.7%.
Germany was a beacon in the past few days, where inflation rose for the third month in a row against all estimates. to 11.6%. Sizes that can only be compared to the time when the country was divided. Inflation is also at a 38-year high in Italy, with inflation of 12.8%
These highs in inflation in the Eurozone and in its major economies occurred despite the fact that energy prices have de-escalated. Greece belongs to the beneficiaries, as inflation plunged to 9.8%. Only 3 countries showed lower inflation compared to September, Greece, the Netherlands and Estonia.
October began with a natural gas price of €195/Mwh and ended with €139/Mwh, a 28% drop that also affected the price of electricity.
Somehow, Greece now belongs to the minority of countries that now have single-digit inflation, 8 against 11.
The Baltic countries Estonia, Latvia and Lithuania emerged as inflation champions for October as well.
The inflationary fire is maintained by energy where inflation for the second month in a row exceeded 40% with 41.9%. However, particularly worrying are the data on the inflation of unprocessed food, which is rising month after month, reaching 15.7%, while the inflation of processed food is at 12.4%. Not at all reassuring is the picture in services, where inflation is heading towards 5%, erasing the fourth consecutive month of increase.
With inflation persisting and strengthening, the pressures on the ECB for a more drastic increase in interest rates are intensifying. ELSTAT’s announcement came 4 days after Frankfurt’s decision to proceed with the third consecutive increase in interest rates, with the main rate now at 1.5% from negative in July.
A new source of uncertainty for food prices is Russia’s decision not to renew its participation in the agreement on seamless export of Ukrainian grain. Already markets are reacting with wheat futures up close to 6%, corn 2.5%, cereals 5% and rice 1.8%
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I have worked in the news industry for over 10 years and have been an author at News Bulletin 247 for the past 5 years. I mostly cover technology news and enjoy writing about the latest gadgets and devices. I am also a huge fan of music and enjoy attending live concerts whenever possible.
