Brussels, July 29 (BNA): Inflation in European countries that use the euro currency rose to another record in July, driven by higher energy prices, but the economy still managed some anemic growth.
Annual inflation in the 19 eurozone countries rose to 8.9% in July, up from 8.6% in June, according to the latest figures published on Friday by the European Union’s statistics agency.
The inflation rate reached its highest level since 1997, when records began to be kept for the euro, according to the Associated Press.
Energy prices rose 39.7%, slightly less than the previous month, while food and tobacco prices rose 9.8%, faster than the increase recorded last month.
Meanwhile, the eurozone economy grew from April through June, expanding 0.7% over the previous quarter and up 4% over the same period in 2021.
This contrasts with the United States, whose economy has shrunk for two straight quarters, raising fears of a recession as inflation hits a 40-year high.
But the labor market is stronger than it was before the COVID-19 pandemic, and most economists, including Federal Reserve Chairman Jerome Powell, said they don’t believe the economy is in a recession.
However, many are increasingly expecting the economic downturn in the US to start later this year or next, as in Europe.
To combat spiraling inflation, the European Central Bank raised interest rates last week for the first time in 11 years by half a point larger than expected. Another increase is expected to follow in September.
The European Central Bank had lagged behind other central banks such as the Federal Reserve and the Bank of England in making credit more expensive, fearing the huge impact of war-related energy price hikes.
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