Hiking interest rates and high inflation: Italians, whole Europe feel the crunch inbox

Max Civili
Press TV, Rome

The recent decision by the European Central Bank to raise interest rates by a further 0.5 percent has thrown Italian families and small and medium entrepreneurs into the depths of gloom.

Prices in Italy rose 8.1 percent year-on-year in 2022, hitting a 37-year high. Now, Italians see themselves stuck between a rock and a hard place.

The country's inflation rate had shot up to around 12 percent in the months between October and December, a trend also seen across Europe. This is due to soaring energy and food prices linked primarily to the conflict in Ukraine and the related rearmament spending that all members of the bloc are engaged in.

However, it is also caused by governments having thrown support packages worth hundreds of billions of euros at corporations and the rich over the past years.

Although inflation rates have recorded 'a clear abatement' across Europe, Italy is still dealing with two-digit inflation which stands at over 10.1 percent.

The European Central Bank’s latest rate hike has brought the total increase in interest rates to 3 percent over the past six months. The EU's Governing Council is expected to raise them further next month.

According to a survey of some 27,000 citizens commissioned by the European Parliament, more than nine out of ten of Europeans are very concerned about the rising cost of living.

About 40 percent of the people living in the EU feel they are already struggling to pay for food and other basics and almost one in two says their standard of living has fallen. But, more worryingly, they are not holding out much hope for the future either as another 39 percent expect their standard of living to fall this year.

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