Eurozone inflation soars

Inflation in the eurozone hit a
20-month high last month, European Union data has shown.

Annual inflation in the 16-nation
bloc rose to 1.7 per cent in July, up from 1.4 per cent in June and the highest
rate since November 2008, Eurostat said.

The figure was boosted by more
expensive fuel costs for transport, and higher alcohol and tobacco prices.

Across all 27 nations in the
European Union, prices were up 2.1 per cent in July, compared with a rise of
1.9 per cent in June.

Some countries – Finland, Greece,
Spain, Portugal and Romania – raised their rates of VAT in July, which also
helped to push prices higher.

“The core inflation rate is
slightly higher but with the VAT hikes that there have been in the eurozone,
that’s not surprising,” said Astrid Schilo, Europe economist at HSBC.

On a month-on-month basis, prices
in the eurozone fell 0.3 per cent in July, and in the wider EU fell 0.2 per
cent.

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