Inflation levels in Europe rose to the highest point in sixteen years even as the European Central Bank struggled with tough decisions directed at charging up the economy. This comes in the wake of separate reports which show a continued slide in employment levels all over the continent.

Statistics from the European Union office at Luxembourg pegged current inflation rates at 4.2 percent which is the highest since April 1992. Unemployment levels also touched north and stood at 7.3 percent in June this year. The European Central Bank which attempts to restrict inflation levels to below 2%, responded by raising interest rates in an effort to control spiraling inflation. However, economists fear that as loans become more expensive, economic growth will take a beating.

Worldwide trends of a sluggish economy were also reflected in Europe’s leading service and manufacturing industries which are suffering from a slowdown and lowest confidence levels since the terrorist attacks of September 11, 2001. Rising living costs coupled with soaring fuel prices have led to restricted purchasing power for the average person. One of most troubling outcomes of this situation might be growth of labor unrest all over Europe as workers continue to demand higher wages.

-Kalyani Mookherji