Europe in trouble: Inflation in the Eurozone hits a record high of 10.7%

YEREVAN (CoinChapter.com) — Amid the ongoing war in Ukraine caused by the unprovoked Russian invasion, Europe has found itself in a deep financial crisis. Inflation in the Eurozone has now hit a new record high. According to the preliminary data, inflation in the 19-member block reached 10.7% in October. The reading was 9.9% in September.

Although Eurostat, the official statistics agency of the European Union, will release the official numbers next month, experts believe inflation has surpassed the 10% threshold.

According to the agency, energy prices in October were 41.9% higher than a year ago. 

Prices for food, alcohol, and tobacco are also up by 13.1% year-on-year, while services climbed 4.4%.

A cold winter awaits citizens of the European Union member countries as each country has individually reported worrying numbers. While France reported inflation of 7.1%, that number reached 11.6% In Germany and 12.8% in Italy. 

Meanwhile, the Baltic countries continue to be the most affected. The annual inflation in Latvia, and Lithuania remains above the 20% mark, while Estonia leads the group with a massive 22.4% estimate.

Latvia, Austria, and Belgium also recorded negative growth in their GDP. While in Latvia the number was -1.7%, the GDP of Austria and Belgium fell by -0.1% each. 

Meanwhile, the United Kingdom (UK), which left the European Union in 2020, is facing a crisis of its own. Rising energy costs are expected to put inflation in the nation way above the 11% mark.

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Electricity, and gas prices in the European Union spike

As per the detailed report of Eurostat, energy prices in the European Union continue to rise. In the first half of 2022, average household electricity prices in the EU jumped from €22.0 ($21.07) per 100 kWh to €25.3 ($24.98) per 100 kWh. 

Average gas prices also spiked over 34% from €6.4 ($6.32) per 100 kWh in 2021 to €8.6 ($8.49) per 100 kWh in the first half of 2022. 

According to Eurostat, 22 out of the 27 EU Member States registered an increase in household electricity prices. The Czech Republic noted a 62% increase, while in Latvia and Denmark, that number was 59% and 57% respectively.

Meanwhile, five member states saw a decrease in household electricity prices, with the largest being in the Netherlands (-54%). Other countries that saw a reduction include Slovenia (-16%), Poland (-3%), Portugal (-1%), and Hungary (-1%). 

However, these decreases were mainly due to Government regulations and subsidies. 

Gas prices also increased in nearly all EU Member States. Compared to the first half of 2021, gas prices saw a massive increase in nearly all member states. 

Estonia, Lithuania, and Bulgaria saw the most increases, with each reporting a spike of 154%, 110%, and 108% respectively, according to the Eurostat data. 

Meanwhile, the economy of the Eurozone is also slowing down. The seasonally adjusted GDP increased by just 0.2% compared to the previous quarter. That is a 0.6% drop from the second quarter figures. 

With the inflation in the Eurozone at record highs, things are likely to go downhill as Russia continues its offensive in Ukraine.