According to Eurostat, the EU’s inflation rate hit 3% in July while the rate in the Euro area hit 2.9%, up from 2.8% in June. A year earlier, inflation stood at 2.4% in the EU and 2% in the Euro area.
The countries with the highest inflation rates were Romania at 8.2%, Lithuania at 5.4%, and Cyprus and Bulgaria at 4.4%. The lowest rates were recorded in Sweden at just 0.3%, Czechia at 1.3%, and Denmark and Hungary at 1.6%. Inflation fell in 15 EU Member States compared with June, remained stable in three and increased in nine.
Malta’s inflation rate increased slightly from 2% in June to 2.1% in July, remaining below the EU and Euro area averages.
The European Central Bank increased all three rates by 25 basis points in June amid renewed inflationary pressures, with the deposit facility at 2.25%, the main refinancing rate at 2.40% and the marginal lending facility at 2.65%.
Energy remains one of the major factors pushing European inflation higher. Euro area energy prices increased by 10.3% annually in July and contributed 0.94 percentage points to overall inflation. Services, however, remained the largest contributor, adding 1.55 percentage points.
Higher energy prices have been exacerbated by the war with Iran and continued disruption and uncertainty over shipping through the Strait of Hormuz. Brent crude futures price was trading at around $92 as of writing.
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