Inflation in the European countries using the euro currency shot up to another record in July, pushed by higher energy prices driven partly by Russia's war in Ukraine, but the economy still managed some meager growth.
Annual inflation in the eurozone's 19 countries rose to 8.9% in July, an increase from 8.6% in June, according to the latest numbers published Friday by the European Union statistics agency. Inflation has been running at its highest level since 1997, when record-keeping for the euro began.
Energy prices surged by 39.7%, slightly lower than the previous month, while prices for food, alcohol and tobacco rose by 9.8%, faster than the increase posted last month.
The eurozone's economy, meanwhile, grew from April through June, expanding by 0.7% compared with the previous quarter and up 4% over the same period in 2021.
That contrasts with the United Statesraising fears of a recession with inflation at 40-year highs. But the job market is even stronger than before the Covid-19 pandemic, and most economists, including Federal Reserve Chair Jerome Powell, have said they don't think the economy is in recession.
Many, however, increasingly expect an economic downturn in the U.S. To begin later this year or next, much like in Europe. Europe's proximity to the war in Ukraine and its reliance on Russian energy mean it's at risk of recession as Moscow throttles down flows of natural gas that power factories, generate electricity and heat homes in the winter.
More reductions this week through a major pipeline to Germany, Nord Stream 1, have heightened fears that the Kremlin may cut off supplies completely. That would force rationing for energy-intensive industries and spike already record-high levels of inflation driven by soaring energy prices, threatening to plunge the 27-nation bloc into recession.
While European Union governments approved a measure this week to reduce gas use by 15% and have passed tax cuts and subsidies to ease a cost-of-living crisis, Europe is at the mercy of Russia and the weather.