Against the background of the ongoing energy crisis in Europe, the consumer price index in the Eurozone jumped in October to a double-digit level of 10.7% on an annual basis from a level of 9.9% in September.
This was reported today by the Central Bureau of the Eurozone.
The inflation figures exceeded the economists' forecasts, which were for an increase of 10.3% in the last year.
The sharp increase in the level of inflation is mainly led by the surge in energy and food prices.
In order to curb the rampant inflation, last week the Central Bank of Europe raised the interest rate in the Eurozone by a sharp rate of 0.75% to 1.5%, in line with expectations.
At the press conference held after the interest rate announcement, the Governor of the Central Bank, Christine Lagarde, stated that interest rates in the Eurozone will continue to rise and added that the economy slowed considerably in the third quarter and that there is a high chance of the European economy entering a recession.
Demonstration against the cost of living in Leipzig, Germany,
The sharp increase in inflation in Europe is expected to lead to another interest rate increase in the upcoming decision of the European Central Bank, although it is possible that fears about the recession may moderate the rate of interest rate increases in 2023.
Modi Shafferer, Chief Financial Markets Strategist at Bank Hapoalim, said in a conversation with Israel Hayom because "inflation in Europe, Israel's largest trading partner, rose sharply in October to 10.7%, against the background of a sharp increase in inflation in Germany (11.6%), Italy (12.8%) and France (7.1%). Even more disturbing is the fact that the producer price index In Europe (PPI) jumped by 43.3% in the last year, mainly due to a very sharp increase in energy prices."
Shafferer adds: "On a slightly more encouraging note, gas prices in Europe have recently dropped sharply to a low level of about 70% of their peak in August, against a background of relatively favorable weather that allows European countries to increase the volume of natural gas in storage reservoirs. At the same time, gas prices are still high Very much in a historical perspective."
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