European Union's inflation average hits 10.9% in September

Brussels

European Union is grappling with an economic conundrum. According to a Eurostat report released on Wednesday, inflation hit an average of 10.9 per cent across the 27-nation bloc in September, up 0.8 per cent from the record set in August.

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The report by the EU's statistics office added that the annual rate of inflation in the Eurozone was 9.9 per cent in September, compared to 9.1 per cent in August.

Notably, last month, 19 eurozone countries reported double-digit overall inflation. Meanwhile, former EU member, Britain's inflation rose to a 40-year high in September, rising above 10 per cent on soaring food prices, official data released on Wednesday revealed.

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The September rate matched the level in July and is the highest in 40 years as a result also of sky-high energy bills.

"I understand that families across the country are struggling with rising prices and higher energy bills," Britain's new finance minister Jeremy Hunt said in a separate statement.

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The situation in the continent has been exacerbated by the eight-month-long Russia-Ukraine war. Moscow has stopped the supply of natural gas through its Nord Stream pipeline and the immediate effect has been the jacked-up fuel prices.

With the winter season fast approaching and utility bills soaring, inflation has gone up manifolds. Most of the countries across Europe do not have energy reserves that can last them the entire season.

Thus, inflation is expected to rapidly climb in the coming weeks. The banks have been increasing interest rates to arrest the slide but so far, it has had little to no influence on the ground.

The EU leaders on Tuesday convened and proposed a $39.2 billion package to aid small and medium-sized firms battling the energy crisis. However, it ought to be an entirely different conversation if the proposal receives the nod of all 27 countries.

(With inputs from agencies)

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