The energy shock remains the first explanation of the price increase on the old continent, but all the sectors are now affected.
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More than 17 % inflation in the Netherlands in September, compared to the previous year. Almost 11 % in Germany, a country historically allergic to the rise in prices. In Belgium, 12 %. Between 22 % and 25 % in the Baltic countries… The statistics of the price increase, published Friday September 30 by Eurostat, brought their new share of historical records. Never, since the creation of the single currency, inflation had been of such a level.
On the entire euro zone, it reaches the symbolic threshold of 10 % in September (over one year) against 9.1 % in August. The exception remains France, where the tariff shield has limited the increase, allowing the lowest level of the countries of the single currency to be displayed, at 5.6 %, in decline compared to August. The gas shock is the main explanation of this outbreak. Russia began in summer by pretending technical problems on gas supply to Europe, before gradually tightening the screw, and ultimately cut the Nord Stream 1.
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On the Dutch market, which serves as a reference in Europe, the price of gas was running in September 2021 around 30 euros per megawatt hour. After the start of the war in Ukraine in late February, he quintuplely, before stabilizing a little below 100 euros until the end of June. But, in July, he went to 200 euros, then he received a peak at 350 euros in August, before returning around 200 euros. Never seen. In these circumstances, energy inflation in the euro zone in September (over one year) is 41 %. But the phenomenon spreads to all sectors. Food is particularly affected, prices that increased by 12 % over a year. 2> a recession seems inevitable
The industry, a high energy consumer, undergoes the same phenomenon: the price of industrial goods increased by 5.6 %. As for the services, where the energy impact is normally more diluted, inflation reaches 4 %. “This jump of inflation in the euro zone in September will be a serious concern for the European Central Bank [ECB]”, underlines Jessica Hinds, of the Cabinet Capital Economics. The ECB, whose mandate is to maintain inflation to 2 %, began to increase its interest rate sharply, from – 0.5 % in June to 0.75 % today. A new increase of 0.75 points at its next meeting, scheduled for October 27, now seems very likely.
“We then await another increase of 0.75 points in December [the next meeting], then 0.25 point in February [that after]”, predicts the Nomura bank. The ECB’s interest rate would then be 2.5 %, at the highest since 2008. This monetary tightening takes place, while the European economy already shows many signs of slowdown. Industrial production is down – the last statistics, for July, indicated a decline of 2.3 %. The index of economic feeling, designed from surveys carried out through the euro zone with households and businesses, fell sharply in September, at 93.7 points, against 97.3 points the previous month, 100 points being the long -term average.
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