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German inflation rose to its highest rate for 40 years as European Central Bank president Christine Lagarde warned that Russia’s war in Ukraine was delivering a “supply shock” to the eurozone economy.
A 39.5 per cent jump in energy prices from a year earlier was the main driver behind Germany’s higher than expected increase in harmonised consumer prices to 7.6%, which was announced hours after the government took the first formal step towards rationing gas supplies. Berlin is preparing for a potential halt in gas deliveries from Russia because of a dispute over payments.
Presenting her gloomiest assessment yet of how the invasion would hit the bloc’s economy, Lagarde said Europe was “entering a difficult phase” as she outlined how the soaring price of energy, food and manufactured goods would squeeze consumers’ purchasing power.
The war was pushing up prices, slashing growth and draining consumer and business confidence, Lagarde said in a speech on Wednesday.
A 39.5 per cent jump in energy prices from a year earlier was the main driver behind Germany’s higher than expected increase in harmonised consumer prices to 7.6%, which was announced hours after the government took the first formal step towards rationing gas supplies. Berlin is preparing for a potential halt in gas deliveries from Russia because of a dispute over payments.
Presenting her gloomiest assessment yet of how the invasion would hit the bloc’s economy, Lagarde said Europe was “entering a difficult phase” as she outlined how the soaring price of energy, food and manufactured goods would squeeze consumers’ purchasing power.
The war was pushing up prices, slashing growth and draining consumer and business confidence, Lagarde said in a speech on Wednesday.
