Euro-zone inflation hits record 8.6%, boosting case for big hikes

Euro-area inflation surged to a fresh record, surpassing expectations and bolstering calls for the kind of aggressive interest-rate increases being deployed by central banks across the world.

Driven once more by soaring food and energy costs, consumer prices jumped 8.6 per cent from a year earlier in June – up from 8.1 per cent in May. 

Economists surveyed by Bloomberg saw a gain of 8.5 per cent. The median estimate in the poll has fallen short for 11 of the last 12 months.

The data reflect an escalating squeeze on households and firms across the 19-member currency bloc, where France, Italy and Spain reported new all-time highs this week. Germany, the continent’s No 1 economy, only saw a slowdown thanks to fuel-tax cuts and public-transport discounts that are temporary. 

In the Baltic region, price growth has shot past 20 per cent.

Governments have weighed in with billions of euros in support, but their ability to help is limited after spending huge sums during the pandemic.