Home Business Monstrous inflation at 10% in the Eurozone increases pressure on the ECB. Top shopping trolley in Italy since 1983

Monstrous inflation at 10% in the Eurozone increases pressure on the ECB. Top shopping trolley in Italy since 1983

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Monstrous inflation at 10% in the Eurozone increases pressure on the ECB.  Top shopping trolley in Italy since 1983

New flare-up of inflation in Italy which in September reached an increase of 0.3% on a monthly basis and 8.9% on an annual basis (from + 8.4% in the previous month). New flare-up also for euro area inflation, which for the first time touches the 10% threshold, fueling the pressures for new substantial rate hikes by the ECB.

It is necessary to go back to July 1983 (when they recorded a trend variation of + 12.2%) to find an increase in the prices of the “shopping cart”, on an annual basis, higher than that of September 2022 (+ 11.1%). Thus, Istat announces that this time, in fact, it is not Energy Goods that explain (except for the consequences that their so large growth has triggered) the new acceleration of inflation, but it is above all Food Goods (both processed and unprocessed) followed by recreational, cultural and personal care services, in a context of growing inflationary tensions that are going through almost all product sectors.

The reactions of consumer associations

Inflation at 8.9% determines a sting for the Italians, considering the total consumption of a “typical” family, equal to + 2,734 euros, of which 657 euros only for food expenditure, the figure rises to +3,551 euros per year for a family with two children. This was stated by Codacons, commenting on the data released today by Istat. “We are facing an unprecedented economic tsunami, and the growth in retail prices is unfortunately destined to worsen in the coming weeks – explains the president of Codacons, Carlo Rienzi – The maxi-increase of + 59% in electricity bills that will start from ‘October 1, and the new increases in gas at the gates, will push inflation upwards, as companies, businesses and production activities will not be able to absorb such high energy costs, which will inevitably be downloaded to the public price lists ”.

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“The risk is that of a vertical collapse in household consumption in the last months of 2022, with cascading effects on the economy. For this reason, we ask the new government to immediately order the cut in VAT on foodstuffs, which in September recorded a surge of 11.8% with repercussions of +657 euros per family, and on basic necessities, in order to lighten household spending and contain the disastrous effects of inflation ”- concludes Rienzi.

“Italians in trouble! Inflation is swooning the Italians! An earthquake is hitting families, emptying their bank account, given that certainly the salary can no longer be enough to make it to the end of the month. A new bonus is urgently needed for families, but it must be at least three times higher than the 200 euros of the Draghi government, so as to cover at least almost all the major expenses for food and drink, ”said Massimiliano Dona, president of the National Consumers Union. “For food and drink, in fact, which have taken off by 11.8%, a family will pay an average of 665 euros more on an annual basis. A blow that rises to 907 euros for a couple with 2 children, 819 for a couple with 1 child. In the case of couples with 3 children, then, there is a record blow of 1084 euros in the twelve months ”continues Dona. “With regard to inflation as a whole, + 8.9% means, for a couple with two children, an overall sting, in terms of an increase in the cost of living, equal to 2956 euros on an annual basis, of which 1211 for housing, electricity and fuel, 940 for the shopping cart alone. For a couple with 1 child, the additional annual cost is € 2738. On average for a family the increase is 2336 euros, 691 for the shopping cart alone. The primacy goes once again to large families with more than 3 children with a scoppola equal to 3321 euros, 1116 for food and for home and personal care ”concludes Dona.

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Eurozone inflation hits 10%, ECB

Even at the eurozone level, things are not going well. According to Eurostat, the consumer price index in the area marks + 10% against + 9.7% expected by the consensus. It is a new record since the introduction of the single currency.

Energy is expected to have the highest annual rate in September (40.8%, compared to 38.6% in August), followed by food, alcohol and tobacco (11.8%, compared to 10.6% in August) , non-energy industrial goods (5.6%, compared to 5.1% in August) and services (4.3%, compared to 3.8% in August). According to experts from Oxford Economics, with the ECB fully focused on inflation readings, today’s rise in eurozone inflation will prompt another hawkish response, with the policy meeting in late October expected to lead to a further hike. of 75 bps.

“The differences in inflation between countries are becoming more significant as measures at the national level begin to complicate the general picture”, note instead the experts of Ing who underline how the measure of public transport in Germany has pushed inflation upwards to September, but France saw a declining inflation rate mainly due to government measures to improve purchasing power. “Expect government intervention to intensify in the wake of still soaring inflation rates and, as long as this is not coordinated in Brussels, expect an ongoing confused picture in the eurozone”, argues ING, adding from a central bank perspective: “The Divergence between countries would normally complicate the picture for the ECB, but with current high inflation rates the trajectory is clear: the ECB is set to rise sharply at upcoming meetings to quickly reach neutral position and possibly beyond. The first stop is the October meeting, where another 75 basis point increase is now the most likely outcome ”.

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