Dutch inflation climbs to record 12%

Inflation in the Netherlands rose to 12 percent in August, from 10.3 percent a month earlier. A new record for the Netherlands, Statistics Netherlands (CBS) reported, using its own calculation method. Higher energy bills, in particular, led to rising inflation. CBS’s own calculation includes, among other things, housing costs like rent. The European method does not take account of this.

Energy was 151 percent more expensive in August than in the same month a year earlier. In July, it was 108 percent more expensive. Clothing and food also rose in price. CBS highlighted pasta products as becoming considerably more expensive. Motor fuels rose less rapidly on an annual basis than a month earlier. That pushed inflation down a bit.

Last week, CBS published inflation figures based on the European harmonized method. That showed that prices in the Netherlands rose by 13.6 percent on average.

The ever-rising inflation puts pressure on the European Central Bank (ECB) to raise interest rates even more. The ECB will make a new interest rate decision on Thursday. The central bank could then raise interest rates by 0.75 percent. In July, it increased the interest rate by 0.5 percent. Several bank policymakers, including President Klaas Knot of De Nederlandsche Bank and Joachim Nagel of the Bundesbank, have argued for a stronger interest rate hike against the high inflation.

More and more economists fear that the eurozone economy could end up in recession due to interest rate hikes and high inflation as households’ purchasing power faces severe pressure and people are more likely to stick to their budget. Some companies have also shut down production due to high energy costs.