Euro zone inflation hits record high of 10.7% as growth slows sharply

Euro portion ostentation roseate supra the 10% level successful the period of October, highlighting the severity of the cost-of-living situation successful the portion and adding much unit connected the European Central Bank.

Preliminary information connected Monday from Europe's statistic bureau showed header ostentation came successful astatine an yearly 10.7% past month. This represents the highest ever monthly speechmaking since the euro zone's formation. The 19-member bloc has faced higher prices, peculiarly connected vigor and food, for the past 12 months. But the increases person been accentuated by Russia's penetration of Ukraine successful precocious February.

This proved to beryllium the lawsuit erstwhile again, with vigor costs expected to person had the highest yearly emergence successful October, astatine 41.9% from 40.7% successful September. Food, intoxicant and baccy prices besides roseate successful the aforesaid period, jumping 13.1% from 11.8% successful the erstwhile month.

Monday's information comes aft idiosyncratic countries reported flash estimates past week. In Italy, header ostentation came successful supra analysts' expectations astatine 12.8% year-on-year. Germany besides said ostentation jumped to 11.6% and successful France the fig reached 7.1%. The antithetic values bespeak measures taken by nationalist governments, arsenic good arsenic the level of dependency that determination nations have, oregon had, connected Russian hydrocarbons.

There are, however, euro nations wherever ostentation roseate by much than 20%. This includes Estonia, Latvia and Lithuania.

The European Central Bank — whose superior people is to power ostentation — connected Thursday confirmed further complaint hikes successful the coming months successful an effort to bring prices down. It said successful a connection that it had made "substantial progress" successful normalizing rates successful the region, but it "expects to rise involvement rates further, to guarantee the timely instrumentality of ostentation to its 2% medium-term ostentation target."

The ECB decided to rise rates by 75 ground points for a 2nd consecutive clip past week.

Speaking astatine a consequent property conference, ECB President Christine Lagarde said the likelihood of a recession successful the euro portion had intensified.

Growth figures released Monday showed a GDP (gross home product) fig of 0.2% for the euro country successful October. This is aft the portion grew astatine a complaint of 0.8% successful the 2nd quarter. Only Belgium, Latvia and Austria registered GDP rates beneath zero.

So far, the 19-member bloc has dodged a recession but an economical slowdown is evident. Several economists foretell determination volition beryllium a contraction successful GDP during the existent quarter.

The euro traded beneath parity against the U.S. dollar successful aboriginal European trading hours Monday and up of the caller information releases, and hardly moved aft the caller figures. The euro has been weaker against the greenback and that's besides thing the ECB has been acrophobic astir with concerns that this volition propulsion up ostentation successful the euro portion adjacent further.