Inflation accelerated even further in July. After 8.7 percent in June, the inflation rate is likely to have risen to an average of 9.2 percent in July, according to calculations by Statistics Austria as part of a flash estimate. This is the highest level since March 1975.
“While there are again price increases for household energy and in the catering trade, the prices for food and fuel remain at a high level,” Tobias Thomas, Director General of Statistics Austria, said in a statement today.
The harmonized inflation rate (HICP) calculated for euro zone comparisons for Austria was 9.3 percent in July according to a preliminary flash estimate. The European Central Bank (ECB) actually sees an annual inflation rate of two percent as ideal. On July 21, the ECB Council decided to raise interest rates for the first time in eleven years in order to curb inflation. Higher inflation reduces the purchasing power of consumers because they can afford less for one euro.
SPÖ demands price reductions
The deputy head of the SPÖ club, Jörg Leichtfried, criticized what he saw as the government’s lack of reaction and called for price reductions. Since the fall, the Social Democrats have been demanding an energy price cap, temporary reductions in VAT and a freeze on rents.
