France and Spain experienced new inflation records in June with the latter surpassing the 10% threshold for the first time since 1985.
There are growing questions about the future of monetary policy in the euro zone amid fears of a recession in the coming months.The ECB has announced it will be hiking rates in July and September to counter record inflation.Euro zone inflation reached a new record high in June just ahead of theHeadline inflation came in at 8.6% for last month, according to preliminary figures from Europe's statics office Eurostat. That beat a prediction of 8.4% in a Reuters poll of economists.
But both France and Spain experienced new inflation records in June with the latter surpassing the 10% threshold for the first time since 1985, according to Reuters.The ECB, which has vowed to tackle the surge in prices, is due to meet in late July to announce it's increasing rates. The central bank has said it will hike again in September, meaning its main interest rate could return to positive territory this year — the ECB has had negative rates since 2014.
— most notably over energy and food security — could tip the region into a more proacted slowdown earlier than expected."We are still expecting positive growth rates due to the domestic buffers against the loss of growth momentum," Lagarde said earlier this week. The ECB forecast in June a GDP rate of 2.8% for the region this year. New forecasts will be published in September.
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