Wednesday, November 29, 2023
Spanish inflation unexpectedly slows on fuel and tourism costs. Thus, it is retreating for the first time since June.
Consumer prices rose 3.2% from a year earlier in November, a data showed.
That compares with 3.5% the previous month and defied the median estimate in a survey of economists for an acceleration to 3.7%.
A gauge of underlying pressures that excludes energy and fresh food fell to 4.5%, easing much more than anticipated.
The numbers offer a glimpse into how inflation is faring with European Central Bank interest rates now on hold. This is following an unprecedented bout of hikes.
Germany, the continent’s biggest economy, will release figures later in the day that may reveal a slowdown to 2.5%.
Analysts reckon price gains in the 20-nation euro area as a whole moderated to 2.7% — nearing the ECB’s 2% target. That report is due Thursday.
Spain actually saw inflation drop below the ECB’s goal in the first half of 2023. It later rebounded.
That was largely down to base effects that may persist as the government phases out support to sooth the country’s cost-of-living crisis.
Some measures will stay around.
The government announced this month that it will keep a value-added tax break on food in place until June.
It also said transport will continue to be free of charge for certain groups such as young people.
While ECB officials including Vice President Luis de Guindos have said Europe’s economy is losing steam and that there are risks of a recession.
They’ve also indicated that price gains may pick up again in the short term.
That’s likely to keep interests rates where they are for some time, with policymakers also loathe to discuss when the first cuts may begin.
Tuesday, January 2, 2024
