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Recession fears raised as Eurozone inflation hits record of 8.6%

INFLATION has reached record levels across the Eurozone, reaching a high of 8.6 per cent in June according to the latest figures from Eurostat.

The figures, which were higher than expected, place additional pressure on the European Central Bank (ECB).

According to data, energy prices were up 41.9 per cent in June compared to 39.1 per cent in May which is driving rising inflation. 

The Baltic states are among the hardest hit with inflation at 22 per cent in Estonia, 20.5 per cent in Lithuania and 19 per cent in Latvia. 

The ECB had been expected to raise interest rates by 25 base points next month although this is likely to increase, with a further hike expected in September. 

France has also recorded its highest inflation level in three decades at 6.5 per cent. According to the National Institute of Statistics and Economic Studies, this has been driven by increasing energy and fuel prices. 

In the US, stocks have seen their worst first half of a year since 1970 with the benchmark Standard and Poor 500 index falling 20.6 per cent. 

Analysts warn that the US, along with a number of Western economies may slide into recession later this year. 

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