Eurozone inflation hits a new record high, says Eurostat

The European Union's statistics agency said on Monday (October 31) that inflation in Eurozone was at record 10.7 per cent in October. Just a month before, the same figure was at 9.9 per cent. A huge increase of 41.9 per cent has caused the inflation to jump, said Eurostat. The European Central Bank has already warned last week that a recession is looming. It had announced a jumbo interest rate hike in order to attempt to curb inflation.

Russia's war on Ukraine has also made matters worse. Russia is one of the major gas supplier to Europe. In the wake of Ukraine war, Russia has drastically cut gas supplies to Europe as a result of which the continent is facing energy crisis. There are fears of power shortages just as winter approaches.

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The third quarter figure was marginally better than expected after economic powerhouse Germany bettered forecasts with 0.3 percent growth.

Among other key economies, France and Spain were at 0.2 percent and Italy on Monday announced growth of 0.5 percent.

Eurostat said that overall Eurozone increased by 2.1 per cent as compared to same quarter last year.

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But despite the mildly better-than-expected news, analysts warned that a recession appeared to be on its way regardless.

"It is a matter of how deep the recession will be and not if there will be one," Oxford Economics said in an analyst note.

"Therefore, while Q3 was more resilient than expected a recession over the winter in eurozone is imminent."

(With inputs from agencies)

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