Eurozone Inflation Sets Another Record, Hitting 10 Percent in September

Consumer prices in the countries that use the euro as their currency rose at an annual rate of 10 percent in September, again reaching the highest level since the creation of the euro more than two decades ago.

The previous record was set in August with a double-digit pace.

Energy prices, which rose at an annual rate of 40.8 percent in September, were again the main contributor to accelerated inflation in the eurozone, driven higher by the invasion of Ukraine by Russia. In September, food prices increased by more than 10 percent.

Germany, the largest economy in the eurozone, had its own inflation result the day before come in at 10.9 percent. Before the reunification of the former East and West, Germany had seen the highest rate of inflation in six decades.

Inflation rates were above 22 percent in all of the Baltic countries. The chief economist of the European Bank for Reconstruction and Development said that the increase in wholesale energy prices has been reflected in retail prices. The Netherlands and Slovakia were both in a group of nations with higher than average rates.

Inflation in France, where the government has moved aggressively to cap energy prices, fell to 6.2 percent in September from 6.6 percent the previous month. Food inflation increased despite energy inflation easing. Thousands of people took to the streets on Thursday to demand higher wages.

Lucrezia Reichlin is an economics professor at the London Business School and a former head of research at the European Central Bank. The energy shock is having a bigger effect on all items.

Core inflation, which excludes food and energy, was up from 4.3 percent the month before.

There is still a lot of uncertainty about how inflation will develop in the coming months because the economy will slow down in the future and that will have downward pressure on inflation.

Government policies designed to manage soaring energy costs will be a key swing factor affecting energy prices over the next six months, according to Pantheon Macroeconomics.

Living standards and savings have been affected by inflation. The surge of activity that followed the reopening of economies has pushed up prices. With sanctions imposed by Europe, the United States and their allies, inflation was made worse by soaring energy and food prices.

The European Central Bank is trying to stop inflation in the eurozone. The E.C.B. policymakers are expected to approve another three-quarter-point interest rate increase in October.

The Federal Reserve is trying to beat back inflation by raising interest rates in other countries. American securities and assets are considered to be safe during times of upheaval because of the anxiety about global political and economic turmoil. Bigger returns are offered by higher interest rates.

Some of the United States' inflation is being exported to other countries. The stronger the dollar, the cheaper imports from around the world are in the United States. A strong dollar makes imports in other countries, particularly essential ones like energy and food, more expensive to purchase with weaker currency. Oil is one of the key commodities that are priced in dollars.

Inflation across the European Union, which has 27 members, rose above a 10 percent annual pace in August, with nations that don't use the euro seeing the price of energy and food soar to record heights. In the Czech Republic, which has seen mass protests over the high cost of energy, inflation came in at more than 17 percent in August, roughly the same rate Poland recorded for September, which was a 25 year record.

Consumer prices in Britain rose 9.9% in August from a year earlier, but are still the fastest pace in 40 years. Households and businesses in Britain are feeling the squeeze on their budgets as a result of the government's new economic strategy that upended mortgages, pensions and the value of the pound.

Oil, gas and electricity prices are likely to stay high for a long time as Europe transitions away from Russian energy.

There is only so much central bankers can do when there is an energy shortage and prices go up. He said that prices will stay high because interest rates can't suddenly increase supply.