Eurozone Inflation Expected to Peak in November

Economists expect inflation in the Eurozone to hit a record high in November. Many businesses and investors are concerned over the central bank’s insistence that the inflation period is transitory.

Economists have forecasted that the inflation could decline significantly early next year, pointing towards the fact that inflation peaking will be short-lived. Banks are under pressure to manage rates to tackle to increase in prices. The EU’s statistics agency expected prices will remain 4.3% to 4.5% higher this month. The fastest annual rise in prices has been recorded this year with rate exceeding 4%.

The European Central Bank will lay out future policies for the next year in December. However, policymakers will not take any drastic measures to curb inflation anytime soon. The bank expected the inflation rate to fall again later next year and reach their set target of 2%. Economists have estimated that a large portion of the inflation will directly come from energy. According to the Organization for Economic Cooperation and Development, a measure for core inflation doubled in the U.S in October.

Other factors such as the pandemic have also played a role in boosting inflation. The Eurozone has a larger number of aged population which reduces inflationary pressures. Some economists have said that inflation could come down to even 1% by the end of next year.