Florian Glatz, the co-founder of the German Blockchain Association, states, “Europe is facing historic challenges, with inflation eroding away the economic security of middle and lower income households.”
The Eurozone’s annual inflation rate rose to 9.1%, increasing the pressure on the ECB to raise interest rates and inciting fears of an economic recession.
Eurostat, the statistical office of the European Union, revealed that the inflation rate in the Eurozone’s 19 countries hit a record-breaking 9.1% in August. The figure has surged by 0.2% following the 8.9% inflation rate recorded in July, with Russia’s war in Ukraine triggering a significant spike in electricity, gas, and food prices. Additionally,
Following Eurostat’s report, European indices closed on the lower side due to fears of an economic downturn, with FTSE 100 Index down by 77.48 points and DAX tanking by 126.18 points.
The inflation in energy marks the highest rise out of the other inflation components following Russia halting gas supply to EU countries that have sided with Ukraine. Despite the energy prices being lower than last month’s, Eurostat considers energy rates to hit their peak annual value in August.
Moreover, the prices of food, alcohol, and tobacco have risen at a faster pace, with their inflation rates recorded at 10.6%. The rapid surge in food prices can be attributed to half of Europe being hit by a drought which further crippled the production of crops.
According to economist Bert Colign,
“The gas supply crisis and droughts are adding to persisting supply-side pressures on inflation at the moment.”
Meanwhile, the crypto market holds steady as Bitcoin saw a 20% rise in the last 24 hours and settled above the $20,000 threshold. Florian Glantz claims that the crypto community must push for mass adoption as the current economic institutions are insufficient to keep the problems at bay.
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