Inflation in the eurozone hit another record in August at 9.1%, fueled by soaring energy prices mainly driven by Russia’s war in Ukraine.
That’s according to the latest figures released Wednesday by the European Union statistics agency Eurostat.
Annual inflation in the 19 countries was up from 8.9% in July. It’s at the highest level since record-keeping for the euro began in 1997.
The latest figures add pressure on European Central Bank (ECB) officials to continue raising interest rates. The ECB raised interest rates for the first time in 11 years in July by half of a percentage point.
Prices are rising in many other countries as Russia’s war in Ukraine grinds on, triggering unprecedented increases for energy and food that are squeezing household finances.
Disruptions to global manufacturing supply chains caused by the coronavirus pandemic have also played a role in pushing up prices.
This summer has seen a wave of protests and strikes around the world by workers pushing for higher wages and people fed up with the high cost of living.
Inflation in Britain, Denmark and Norway which have their own currencies, is also surging, according to official data released earlier this month. UK residents face an 80% jump in annual household energy bills, regulators warned last week.
In the eurozone, energy prices surged 38.3%, though the rate was slightly lower than the previous month, while food prices rose at a faster pace of 10.6%, according to Eurostat’s preliminary estimate.
The agency’s final report, released about two weeks later, is usually unchanged.
“Specific European problems continue to push inflation higher,” ING Bank senior economist Bert Colijn wrote in an analyst note.
“The gas supply crisis and droughts are adding to persisting supply-side pressures on inflation at the moment.”
Russia, a major energy producer, has been reducing the flow of gas to European countries that have sided with Ukraine in the war, a move that’s wreaked havoc with prices.
At the same time, nearly half of Europe has been afflicted by an unprecedented drought that’s hurting farm economies, crimping production of staple crops like corn, and driving up food prices.
The euro has also slipped below parity with the dollar which can make imported goods more costly, particularly oil, which is priced in dollars.