Eurozone inflation record: Increase in interest rate expectation strengthens

Inflation in the Eurozone has set a new record with 8.9 percent. Thus, the expectation that the European Central Bank (ECB) will raise interest rates again has strengthened.

The Covid pandemic and the energy crisis caused by the Russia-Ukraine war continue to affect the European economy. According to data from the European statistical agency Eurostat, the consumer prices index (CPI) in the 19-member Eurozone has increased by 8.9 percent.

The index was up 8.6 percent last month. Core inflation, which slowed down in June, hit a record high of 4 percent.

The ECB had increased interest rates by 50 basis points this month after 11 years due to the historic rise in inflation. The record-freshening inflation also strengthened expectations that the interest rate hike will continue.

Prediction of recession

Also, according to the data announced today, the regional economy grew by 0.7 percent in the second quarter of the year despite the rise in inflation. Growth was 4 percent year-on-year.