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Inflation in the euro zone soared to more than twice the European Central Bank’s target in October, according to Eurostat, the European Union’s statistics office, with energy prices accounting for more than half of the increase.
Inflation in the 19 euro-area nations jumped 0.8 percent month over month in October, resulting in a 4.1 percent year-over-year increase, according to Eurostat.
The European Central Bank (ECB) seeks to keep inflation around 2.0 percent in the medium term and has stated that the recent spike in inflation is just temporary.
Price rise will halt in 2022, according to the bank, although it will take longer than predicted. More expensive energy increased 2.21 percentage points, services added 0.86 percentage points, food, alcohol, and tobacco added 0.43 percentage points, and non-energy industrial products gained 0.55 percentage points, according to Eurostat.
Core inflation, which excludes volatile energy and unprocessed food costs, gained 0.3 percent month over month for a 2.1 percent year-over-year increase.
Many economists looked at a more granular measure that excluded alcohol and cigarettes and found that prices rose 0.3 percent month over month but only 2.0 percent year over year.
The ECB is under increasing pressure to quit its ultra-easy monetary policy and address price rises that is eroding families’ purchasing power. Inflation is currently twice its target and is expected to rise further later this year.
However, tightening monetary policy now might stifle the post-pandemic economic rebound, according to ECB President Christine Lagarde, who rebuffed appeals and market bets for tighter policy.
Story by : Norvisi Mawunyegah