Record Inflation for Europe!
Despite how bad we think inflation is in the US, it’s worse in Europe, where economies are much closer to teetering towards a recession. Europe is at the center of a geopolitical crisis which is deeply affecting economic data and it’s pushed inflation to areas we’ve never seen before in our lifetimes.
Prices in the Eurozone, a bloc of countries in the European Union that have fully adopted the euro, rose by 10.7% from a year prior in the month of October. This is the fastest rate of increase since 1997 when records started being taken for the Eurozone. When going country by country, Germany’s rise in inflation only rivaled a jump 71 years ago in 1951, showing how dire the situation is. Europe had to turn to expensive gas imports from other countries due to Russia cutting off supply, and food prices continued to be a struggle as they were up 13.1% from last year. This issue could worsen following Russia’s decision to pull out of the deal with Ukraine regarding grain shipments. An unfortunate sign was the rise of core inflation, which excludes energy and food. After a 4.8% increase in September, core inflation rose by 5 percent in October from last year, leaving the European Central Bank in a sticky situation. After many large rate hikes, the ECB formulated a plan to pivot away from that and go for moderate increases. Following this report, we’ll look to see if that “pivot plan” goes into effect at all because it is clear the current rates didn’t do much to curb the problem.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.