Inflation in the eurozone reached a new high in July, pushed up by higher energy prices caused in part by the war in Ukraine, though the economy managed some meager growth.

Furthermore, the consumer price index (CPI) peak could be months away, putting pressure on the European Central Bank (ECB) to hike interest rates again in September.

Annual inflation in the eurozone's 19 countries rose to 8.9% in July, up from 8.6% in June, according to the latest figures released Friday by the European Union statistics agency.

Inflation has been at its highest level since 1997 when the euro was introduced.

Energy prices increased by 39.7%, slightly less than the previous month, while food, alcohol, and tobacco prices increased by 9.8%, faster than the previous month.

Meanwhile, the eurozone's economy expanded from April to June, increasing by 0.7% over the previous quarter and by 4% over the same period in 2021.

In contrast, the US economy has contracted for two consecutive quarters, raising fears of a recession with inflation at 40-year highs. However, the job market is stronger than it was before the COVID-19 pandemic, and most economists, including Federal Reserve (Fed) Chair Jerome Powell, do not believe the economy is in recession.

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Many, however, believe that an economic downturn in the United States will begin later this year or the next, much like in Europe.

Europe's proximity to Ukraine, as well as its reliance on Russian energy, puts it at risk of recession as Moscow restricts natural gas flows that power factories use to generate electricity and heat homes in the winter.

More cuts this week through Nord Stream 1, a major pipeline to Germany, have heightened fears that the Kremlin will completely cut off supplies. Rationing for energy-intensive industries would be forced, and already record-high levels of inflation would be exacerbated by soaring energy prices, threatening to plunge the 27-nation bloc into recession.

While European Union governments approved a measure this week to reduce gas consumption by 15% and passed tax cuts and subsidies to alleviate a cost-of-living crisis, Europe will suffer as a result of its batches of sanctions against Russia.

Read more: Reckless US sanctions on Russia trigger global inflation - The Global Times

A cold winter with high demand for natural gas could deplete storage levels, which governments are now scrambling to fill but have been made noticeably more difficult by Russia's cuts.

Economists' forecasts differ on the impact on economic output, particularly country by country, but ING bank estimates that a complete cutoff of Russian gas to the 19 eurozone countries would cost 1% to 3% of GDP in the short run.

To combat rising inflation, the European Central Bank raised interest rates last week by a larger-than-expected half-point for the first time in 11 years. It will be followed by another increase in September.

Fearing the outsized impact of soaring energy prices linked to the war, the ECB had lagged behind other central banks such as the Fed and the Bank of England in making credit more expensive.