Partly because of the war in Ukraine, energy prices have increased by 40 per cent over the past 12 months, with food inflation up 10 per cent.

At 4 per cent, core inflation, which strips out energy, food and tobacco prices, is also double the European Central Bank’s target.

The bank raised interest rates for the first time in a decade last week and Friday’s inflation figures increase the likelihood of another 50 basis point increase in early September. Both the eurozone GDP and inflation figures were flash estimates by Eurostat, the European Commission’s statistics bureau.

Eurozone consumer confidence indicators are already at record lows, with more households saying that they will delay major purchases. Political turmoil in Italy, which will hold snap elections in September following Mario Draghi’s recent resignation as prime minister, has further worsened the outlook.

“The acceleration in growth is mainly due to reopening effects and masks underlying weakness due to high inflation and manufacturing problems,” said Bert Colijn, senior economist at Dutch bank ING.

French GDP grew 0.5 per cent in the three months to June, with strong exports helping the economy to recover from a first quarter contraction of 0.2 per cent. Italian growth of 1 per cent was far stronger than expected, while Spain grew by 1.1 per cent after a modest expansion of 0.2 per cent in the previous three months.

In Germany, the eurozone’s economic powerhouse, GDP remained at the same level as in the first quarter.

Given German dependence on Russian energy, fears are mounting that reductions — or a complete shut-off — in gas flows through the Nord Stream 1 pipeline to the country could prompt a region-wide recession.

Gas prices soared earlier this week after Russia’s Gazprom said flows through Nord Stream 1 would slow to just 20 per cent of their normal level.

The higher cost of oil and gas imports resulted in a massive deterioration of Germany’s trade balance which knocked back growth, said the federal statistics agency Destatis, adding that economic activity was buoyed by household and government spending.

But she acknowledged inflationary pressures were damping domestic demand, as concerns grow about the rising cost of living: “Italians are afraid to spend money.”

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