Consumer prices in Europe continued their steady upward march in August, driven by soaring food and fuel prices and shortages caused by clogged supply chains.
In the 19 countries that use the euro as currency, the annual inflation rate jumped to a fresh record of 9.1 percent, up from 8.9 percent in July, according to estimates released Wednesday by the European Commission’s statistical office. A year earlier, inflation was 3 percent — a rate that at the time marked a 10-year high and set off alarms, but would now be greeted with enormous relief.
Hardest hit was Estonia, with inflation that surged above 25 percent, with Lithuania and Latvia not far behind. France was among the few countries that saw its price index dip, to 6.5 percent in August, from 6.8 percent in the previous month. Nine countries registered double-digit annual inflation in August.
The report, which comes a week before the European Central Bank is scheduled to meet, will likely serve to reinforce the view that interest rates need to be raised again to curb inflation, despite the risk of recession.
Speaking at an economic summit in Jackson, Wyo., over the weekend, Isabel Schnabel, a member of the bank’s executive board, warned that inflation was more persistent than expected and said the bank needed to act “forcefully.”
Claus Vistesen, the chief eurozone economist at Pantheon Macroeconomics, said the comments were evidence that inflation is the central bank’s primary concern at the moment, “despite increasing evidence of slowing economic growth.”
Energy prices had the biggest impact in pushing up prices, rising by an annual rate of 38.3 percent in August. Food, alcohol and tobacco prices rose by an annual rate of more than 10 percent.