BRUSSELS (Washington Insider Magazine) – Inflation in the eurozone’s 19 member nations hit a new high as increasing fuel costs, bolstered by the conflict in Ukraine, place fresh strains on household budgets and constrain the recuperation from the recent COVID-19 outbreaks.
The European Union’s statistics office Eurostat announced Friday that annual inflation touched 7.5 percent in April, the most since figures began in 1997 and the sixth consecutive record, surpassing the previous high of 7.4 percent set in March.
Energy costs have risen by a shocking 38 percent, demonstrating how the conflict and the resulting worldwide energy shortage is impacting the 343 million people living in the eurozone.
Concerns that the battle may disrupt Russia’s gas and oil supply, the world’s top oil supplier, have pushed natural gas and oil prices higher. This is on top of rising global demand as the world recovers from the pandemic, as well as OPEC and its allies, notably Russia, taking a careful approach to expanding output.
As governments implement monetary assistance for hard-hit people, high inflation is rippling through economics and politics. Germany is eliminating a levy on electricity bills for promoting renewable energy, saving a household of four roughly 300 euros ($317) each year. According to ABC NEWS, Germany’s IG Metall industrial union is seeking an 8.2 percent yearly hike for the nation’s steelworkers as part of wage negotiations.
Fear of even higher power, heating, and motor fuel prices is one reason preventing European nations from agreeing to cease Russian energy imports as part of the sanctions imposed in response to Moscow’s invasion of Ukraine.
Inflation is also increasing stress on the European Central Bank to consider increasing interest rates from their current record lows in the months ahead. Higher rates to combat inflation might stymie a recovery already stymied by the energy crisis, the war, and the recent COVID-19 outbreaks.
In the first 3 months of this year, growth in the 19 EU member nations that use the euro decelerated to 0.2 percent, as voluntary and government regulations during the spread of the extremely contagious omicron variant of the coronavirus, combined with higher inflation, held back demand as individuals used fewer in-person services. The result for the first quarter fell from 0.3 percent in the last 3 months of 2021.
