While in Germany the fuel discount and 9-euro ticket for the train have recently pushed down inflation somewhat, inflation in the euro zone has continued to rise overall.

As the European statistics office Eurostat announced on Tuesday, inflation was 8.6 percent in June.

This confirmed a first estimate.

In May, the inflation rate was 8.1 percent.

Christian Siedenbiedel

Editor in Business.

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In several euro countries, the inflation rate is now 20 percent or more, including Estonia at 22 percent and Lithuania at 20 percent.

According to the European method of calculating the harmonized index of consumer prices (HICP), the inflation rate in Germany was 8.2 percent in June.

In a European comparison, this is still in the middle.

At 6.5 and 6.1 percent, France and Malta have lower rates in a European comparison.

So far, cheaper raw materials have been of little help

Prices are now rising across the board.

Energy remains the most important driver of inflation compared to the previous year.

However, the rise in the price of many foods has also pushed inflation further.

Recently, some raw materials such as copper had become significantly cheaper, and the price of oil had also moved away from its highs.

However, according to many economists, not all of the price increases have been passed on to consumers at the earlier stages.

Many experts expect inflation rates to peak in September.

However, a lot depends on how the deliveries, especially of gas from Russia, will continue.

The further increase in inflation is also explosive because the European Central Bank wants to decide on the further direction of monetary policy on Thursday.

The first rate hike in the euro area in eleven years is expected.

Is the ECB now daring to take a bigger interest rate hike?

So far, the vast majority of economists had only expected a small rate hike of 0.25 percentage points.

On Tuesday, however, the Bloomberg news agency, citing circles, reported that the Governing Council could also discuss a larger rate hike of 0.5 percentage points on Thursday.

The reason for this is the deteriorated inflation environment.

Such a move would be a drastic departure from the guidelines that the majority of ECB Governing Council members have stuck to since the last meeting on June 9th.

However, it would also bring the ECB closer to the global trend towards stronger rate hikes.

Whether there will be enough support for a 50 basis point hike is unclear, it said.

Chief economist Philip Lane will present the official proposal at the meeting.

He has a relatively high weight in the central bank.

An ECB spokesman declined to comment, citing the bank's dormancy.

President Christine Lagarde indicated in a speech on June 28 that she was considering a possible increase of more than 25 basis points.

Shortly thereafter, inflation in the euro zone rose more than expected to a new all-time high of 8.6 percent - more than four times the ECB's 2 percent target.

Financial markets react to some extent

"There are clearly conditions where gradualism would not be appropriate," Lagarde said in the speech.

For example, if we see higher inflation that threatens to undermine inflationary expectations, or if there are signs of a permanent loss of economic potential that constrains resource availability, we would need to withdraw accommodative policies more quickly to reduce the risk of a self-fulfilling prevent spiral."

The yield on Germany's Treasuries -- the securities among the most sensitive to policy changes -- rose as much as 10 basis points to 0.62 percent on Tuesday.

The euro gained 1 percent against the dollar.

The yield on the ten-year Bund rose by 3 basis points, which is still within the usual range of fluctuations.

In any case, the President of the Munich Ifo Institute, Clemens Fuest, does not consider the interest rate hike originally promised by the ECB to be sufficient.

Instead of the planned increase in the key interest rate by 0.25 percentage points, an increase of at least 0.5 points would be appropriate, Fuest told the “Münchner Merkur”.

The ECB must take more consistent action against inflation so that it does not take hold.

"The main thing now is to prevent private households and companies from adjusting to permanently higher inflation rates and raising wages and other prices accordingly," said Fuest.

It is not yet too late to prevent a wage-price spiral.