A surge in energy prices due to ongoing conflicts in the Middle East has led to a rise in inflation in the Eurozone, according to the latest data released by Eurostat, the statistical office of the European Union.
The annual inflation rate in the Eurozone increased to 2.9% in July, up from 2.8% in June, exceeding the European Central Bank’s (ECB) target of 2%.
Eurostat reported that energy prices rose by 10% in July, up from 8.5% in June, while food prices decreased to 1.2% from 1.5% in June.
The ECB, led by President Christine Lagarde, has warned that the ongoing tensions between the US and Iran could lead to further pressure on energy markets and, in turn, drive inflation higher.
Although the ECB kept its key interest rates unchanged on July 23, it has left the door open for a possible rate hike in September, citing the potential impact of Middle East tensions on inflation.
Meanwhile, Pakistan, which has been mediating between the US and Iran, announced that talks between the two countries are ongoing despite recent military clashes.
The core inflation rate, which excludes energy and food prices, also rose to 2.5% in July from 2.4% in June.
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