Eurozone inflation figures for October are in. Much to the relief of many, the figures came in at 10.6%, lower than expected.
The previous survey, published at the end of October, estimated a record-breaking annual price increase of 10.7%. Inflation in the European Union rose to 11.5%. Compared to September 2022, prices rose by 1.5% in the Eurozone and by 1.4% in the EU.
The HICP (Harmonized Index of Consumer Prices) or core inflation (excluding prices for energy, food, alcohol and tobacco) increased by 0.6% per month, or 5% per year. Energy accounted for 4.44 percentage points, followed by food, alcohol and tobacco (2.74%), services (1.82%) and non-energy industrial products (1.62%).
Energy costs have taken their toll worldwide. Just a year ago, in October 2021, energy prices in the Eurozone were 41.5% lower.
Since July the European Central Bank has raised interest rates significantly in an effort to curb price increases. It aims to keep inflation at 2% over the medium term.
More rate hikes to curb inflation?
The current figures are far from the goal of the European Central Bank. It is therefore very likely that interest rate hikes will continue.
Inflation in the United Kingdom (UK) has reached a level 41-year high of 11.1%. On the other hand, so were US inflation numbers in October lower than expected at 7.7%. However, the number is still higher than the intended target of the FED (Federal Reserve). Therefore, interest rate hikes should be expected worldwide.
2022 was one of the worst years for global finance. The war between Russia and Ukraine and the consequences of the Covid-19 pandemic have cost us dearly. According to experts, the current economic malaise could last until 2024. Even Tesla CEO and current owner of Twitter, Elon Musk, believes that a recession may last until spring 2024.