AFP
Consumer prices in the euro zone rose by a record 10 percent in September, official data showed Friday, while inflation hit double-digits on the back of a sharp rise in energy prices caused by the Russian war on Ukraine.

With energy prices rising by 40.8 percent, the annual inflation rate in the eurozone, which includes 19 countries, reached its highest level since the data began to be recorded, according to the agency "Eurostat".

The historical level of inflation will encourage the European Central Bank to stay on its current path of raising interest rates, in an attempt to mitigate the price hike despite the risk of causing an economic recession in Europe.

The European Central Bank is trying very hard to prevent inflation from becoming an entrenched phenomenon in the economy and is taking measures to reduce demand, which in turn will slow growth.

In an emergency attempt to control prices, the energy ministers of the European Union agreed on Friday to reduce energy consumption in peak hours and impose exceptional taxes on energy companies.

The rise to 10 percent follows an increase of 9.1 percent recorded in August, which led to fading hopes that inflation levels could decline with the stability of energy markets seven months after the start of the Russian invasion of Ukraine.

The rise in inflation rates varied widely among the economic powers of the Eurozone, as prices in Germany rose by 10.8 percent, while they rose in France by 6.2 percent, which increases complications for policy makers.

In the Netherlands, the inflation rate rose by 17.1 percent, the highest rate since World War II, compared to 12 percent recorded a month ago.

Other countries in the eurozone are moving to put in place big spending plans at the national level to ease the burden of energy prices on consumers, further fragmenting the European economy.

- An expected rate hike -

Faced with a difficult attempt to balance, European Central Bank President Christine Lagarde indicated this week that she will press ahead with a massive 0.75 percentage point interest rate hike at the bank's next meeting on October 27.

"We expect to raise interest rates further during the upcoming meetings to ease demand and protect against the risk of a continuing upward change in inflation expectations," she told European lawmakers.

Energy prices in Europe remain under great pressure as Russia reduces gas supplies to the continent as winter approaches.

The European Central Bank's target is 2%, while efforts to approach that level have raised fears that the central bank could lead the bloc into a recession in its efforts to bring down prices.

"A rise in headline inflation in the eurozone in September to decimal numbers will be a major concern for the European Central Bank," said Jessica Hinds of Capital Economics.

"Despite the weak economic outlook, we expect banks to prioritize inflation and announce a new rate hike next month," she added.

Data published by "Eurostat" on Friday also showed that the unemployment rate in the euro area is still at a record low, reaching 6.6 percent in July.

This would encourage the European Central Bank to stay on the same path, prioritizing the fight against inflation over alleviating concerns about economic growth and its implications for employment.