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EUROZONE INFLATION SETS ANOTHER RECORD IN JUNE
Inflation across the 19 Eurozone countries climbed to 8.9 percent in July, a record outstripping the 8.6-percent high mark set in June, the European Union’s statistics office reported last week.
Energy prices soared again, rocketing up 39.7 percent on disruptions in Russia’s natural gas deliveries.
Food prices gained 9.8 percent, slightly more than in June, due to transport troubles and shortages caused in part by the Ukraine war and resulting Western sanctions.
Germany’s economy stagnated (see “Germany Stalls, Other EU Countries Claim Growth in July” in this issue), while the rest of the Eurozone squeaked out 0.7-percent growth measured in euros, but a nearly 9-percent inflation rate meant that the actual volume of goods and services purchased declined sharply.
Europe’s claim of marginal growth contrasted with the U.S.’s two consecutive quarters of economic contraction, increasing fears of a recession.
Although a recession is technically defined as two consecutive quarters of a shrinking economy, the job market remains stronger than before the COVID War and many analysts, including U.S. Federal Reserve chair Jerome Powell and treasury secretary Janet Yellen, have said recently that the U.S. is not in a full-blown recession.
TREND FORECAST: With the European Union telling nations to cut back on gas usage which will in turn slow economic growth, the worst in Europe is yet to come: Dragflation.
And the ECB, by only bringing interest rates to zero from negative .50 basis points knows it… or else they would have raised rates higher to combat inflation which is soaring.