BRUSSELS, July 1, 2022 (BSS/AFP) - Eurozone inflation accelerated to another 
record high in June, official data showed on Friday, as Russia's war in 
Ukraine drives up energy prices and hammers the European economy.

The EU's Eurostat data agency said the increase in consumer prices in the 19 
countries that use the euro reached 8.6 percent in June, leaping from the 
previous record of 8.1 percent a month earlier.

Consumer prices in the eurozone have hit records since November, buffeted by 
sky-high energy prices, which jumped by 41.9 percent over one year, caused by 
the fallout of Russia's invasion of its neighbour Ukraine.

But analysts also pointed to the rise in food prices, which accelerated by 
8.9 percent, showing that the inflation problem was spreading through the 
economy.

"Historically, we have never had such a high figure for the contribution of 
food. It will have a big impact," said Philippe Waechter of Ostrum Asset 
Management.

The European Central Bank has said it will do whatever it takes to bring 
inflation back to its target level, with political pressure high to bring 
energy and food prices into check.

"With eurozone inflation now becoming more broad-based in nature, the outlook 
for the Eurozone for the rest of 2022 continues to look bleak," warned 
Pushpin Singh, Economist at the Centre for Economics and Business Research.

"This comes amid a mounting possibility of a severe gas crisis in Europe, 
with Russia using gas exports as a means to counter sanctions," he added.

- Rate hike -

As the conflict rages on, Russia has shown an increased willingness to cut 
off gas supplies to Europe, a danger that has raised the prospect of energy 
rationing in the eurozone to get through next winter.

Some analysts took solace in the core inflation data, which excludes energy 
and food prices and came in at 3.7 percent, a tiny drop from the previous 
month.

But this would not be enough to change the course decided at the ECB's last 
meeting, when policymakers agreed to the bank's first interest rate hike in 
more than a decade.

The quarter-point raise, set to take place at its next meeting on July 21, 
will raise rates from their historic lows.

"We will go as far as necessary to ensure that inflation stabilises at our 
two percent target over the medium term," ECB head Christine Lagarde said on 
Tuesday.

The ECB is being pressured by some to go faster in halting inflation and 
choose a path more akin to the United States where the Federal Reserve has 
warned it may trigger a recession to cool prices.