Inflation hit a new record in 19 eurozone countries. Economic growth also slowed in anticipation of what economists fear is an impending recession, the AP reported.
Annual inflation reached 10.7 percent in October, the European Union's statistical agency Eurostat reported. That's up from 9.9 percent in September and the highest since euro zone statistics began in 1997.
Natural gas prices skyrocketed after the war in Ukraine as Russia cut pipeline supplies to a minimum. Europe has had to resort to costly shipments of liquefied natural gas from the U.S. and Qatar.
While liquefied gas managed to fill European storage facilities for the winter, higher prices made some industrial products, such as steel or fertilizer, expensive or simply unprofitable to produce. Purchasing power has shrunk as more income goes to fuel bills and utilities, and basic goods such as food have become more expensive.
Natural gas prices for short-term purchases have fallen recently but will remain high in the markets in the coming months, suggesting that expensive energy could be a permanent drag on the economy. Last week's review of professional forecasts by the European Central Bank showed that inflation expectations for next year rose to 5.8% from 3.6%.
Eurostat data showed that food, alcohol and tobacco prices rose 13.1%, while energy prices rose an astronomical 41.9% from a year earlier.
Inflation rates varied widely across countries, from 7.1% in France to 16.8% in the Netherlands among the largest member economies, while the three Baltic states had the highest rates: Estonia at 22.4%, Latvia at 21.8% and Lithuania at 22%.
The economy showed 0.2% growth from July to September, down 0.8% in the second quarter. Economists say higher prices are the main reason, and many predict the economy will contract in the final months of this year and the first half of next year.
Gross domestic product growth was higher than expected, thanks to extensive government support that softened the blow to personal income from inflation, as well as undisclosed savings left by consumers after the worst of the pandemic, Chief Economist Joerg Zeuner said. "However, there's no cause for celebration," he said. "The GDP numbers, along with many other indicators, show that the economy has clearly lost steam over the summer."
