Inflation in the Eurozone reached an all-time high of 8.1% in May, beating the previous record of 7.4% reached in March and April, the European Union statistics agency Eurostat has revealed.
Across the 19 countries that use the euro currency, the record annual consumer price increase was brought about by soaring energy costs, which leapt 39.2% (up from 37.5% in April) and a 7.5% increase in food, alcohol and tobacco prices (up from 6.3% last month), according to Eurostat’s latest estimates.
The EU statistics agency added that even without higher energy and food prices, Eurozone inflation increased from 3.5% to 3.8%.
Brussels said that surging energy and food costs have in part been exacerbated over recent months by Russia’s ongoing special military operation in Ukraine as exports are blocked and Western countries are trying to reduce their reliance on Russian gas. Ukraine and Russia remain major global suppliers of wheat and other agricultural commodities.
Oil prices have meanwhile jumped after EU leaders clinched an agreement to ban 90% of Russian crude by the end of the year, as part of the bloc’s sixth package of sanctions against Moscow in response to its special operation to "demilitarise and de-Nazify" Ukraine.
During Asia hours on Tuesday, US crude futures for July were up 3%, at $118.48 per barrel, while Brent crude futures increased 1.73% to $123.78. At one point, US crude rose to $119.42 per barrel — a 12-week high, according to data released by Refinitiv, one of the world's largest providers of financial markets data and infrastructure.
The EU’s oil embargo on Moscow came after President Vladimir Putin said last week that the anti-Russian sanctions seem to have boomeranged, backfiring on those who had implemented them, and that developed economies haven't seen such high levels of inflation in decades.
“[…] These developed countries haven't seen such inflation in 40 years, unemployment is on the rise, supply chains are being broken, and global crises are intensifying. And in such sensitive areas like food - this is not a joke, these are serious things, which affect the entire system of economic and political relations”, Putin told the Eurasian Economic Forum.
Russia’s special operation in Ukraine was announced by the Russian president on 24 February following a request by the Donetsk and Lugansk People’s Republics to protect them from Kiev’s provocations.