NEW YORK (CNBC) -
Inflation in the euro zone has hit a record high for the sixth consecutive month, sparking further questions over how the European Central Bank will react.
Headline inflation in the 19-member region reached 7.5% in April, according to preliminary estimates by Europe’s statistics office released Friday. In March, the figure came in at 7.4%.
European Central Bank Vice President Luis de Guindos tried to reassure lawmakers over rising prices on Thursday, saying the euro zone is close to reaching peak inflation. The central bank sees price pressures diminishing in the second half of this year, although energy costs are expected to keep inflation relatively high.
The latest inflation reading comes amid concerns over the ongoing war in Ukraine war and subsequent impact on Europe’s energy supply — and how this could affect the region’s economy.
Rising energy prices contributed the most to April’s inflation rate, though they were slightly lower than the previous month. Energy prices were up 38% in April on an annual basis, compared to a 44.4% rise in March.
Earlier this week, Russia’s energy firm Gazprom halted gas flows to two EU nations for not paying for the commodity in rubles. The move sparked fears that other countries may also be cut off.
Analysts at Gavekal, a financial research firm, said that if Gazprom were to also cut supplies to Germany, “the economic effects would be catastrophic.”
Meanwhile in Italy, central bank estimates are pointing to a recession this year if Russia cuts all its energy supplies to the southern nation.
As a whole, the EU receives about 40% of its gas imports from Russia. Reduced flows could hit households hard, as well as companies that depend on the commodity to produce their goods.