FRANKFURT, Germany (TALK) – Annual inflation hit a 10-year high in Europe in August, driven by more costly disruptions to the supply and fuel chain. Economists say the jump is temporary, but it may raise questions about the patience of higher inflation.
The 19 countries that use the euro recorded inflation of 3. 0% a year in August, up from 2. 2% in July, according to figures released Tuesday through European Union statistics firm Eurostat.
Construction was so gigantic in component because some costs were cut a lot a year ago due to point points similar to the coronavirus pandemic. The last time inflation reached such a high point in November 2011.
Oil costs, after a drop in costs a year ago at the height of the pandemic recession, contributed to a 15. 4% increase in energy costs. In the absence of volatile fuels and food, core inflation is 1. 6%. transitory factors, such as the timing of summer retail sales in France and Italy, and the expiration of German tax exemptions on retail purchases.
Economists have cited a number of additional reasons for recently higher costs in Europe: Some hotels and tourism businesses raised costs after pandemic lockdowns ended, while supply chain disruptions and emerging commodity costs drove up costs for goods manufacturers as economic activity recovered.
The inflation factor has caught the world’s attention, especially after the annual inflation of U. S. customers has come to an end. USA It reached 5. 4% in July. He warned that central banks might want to take action if the value increases prove more persistent than expected.
Since many points are temporary, economists do not expect the European Central Bank to control inflation by cutting its stimulus systems or raising interest rates. The central bank’s recent peak projections for June expect inflation to succeed at nine. % for this year’s total, and will fall to 1. 5% next year. The Governing Council of the ECB meets on the ninth of September to review its policy.
However, high inflation is attracting public attention, as evidenced on the front page of the German newspaper Bild pronouncing a “new inflationary shock” after German figures stood at 3. 4% based on the effects of inflation from several regions, the highest in thirteen years. According to Carsten Brzeski, global head of macroeconomic studies at ING Bank, one of the members of the ECB’s governing council, Germany’s Jens Weidmann, warned that inflation could succeed in the upcoming negotiations. 5% and then fall, the long-term path is uncertain.
The highest figures come after a prolonged era of low inflation that is below the ECB’s target but close to 2%. The bank recently revised the target to allow for brief periods of inflation above 2%. Inflation has been low in the evolving world for years. with economists speculating that the reasons may come simply with digitalization, an aging population, and a global festival in hard-working markets.
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