Price rebound in July. Inflation increased 2.7% in this month, according to the advance indicator published on Wednesday the National Statistics Institute (INE). There are four tenths more than the June rate for a base effect associated with the drop in the price of electricity in July 2024 and for the increase in fuels.
The fuels already supposed a boost at prices last month. Inflation rebounded a tenth than expected in June to 2.3% due to the rise in fuels. The increase in prices in gas stations is about justifying by the increase in oil in international markets, in theory the geopolitical tensions, especially between Israel and Iran, although the reality is that the price of the Brent barrel has remained within stability. In May, year -on -end inflation remained at 2%, three tenths below the level of June.
With the rebound of the year -on -year IPC in the seventh month of the year, inflation chains two consecutive months up.
The underlying inflation (excluding from its calculation the energy and food prices for being the most volatile products of the basket of the INE reference to give a more structural vision of inflation.) It continues to stabilized and stays at 2.3% year -on -year, only one tenth above the June variation.
The Ministry of Economy points out that this increase in inflation “is compatible with a strong dynamism of the Spanish economy, which remains as a growth engine among the main European countries.” Despite the increase in prices, the department directed by Carlos Corps points out that “the record in job creation and wages increases are allowing families to progressively recover their purchasing power.”
This price increase, even if it is conjunctural for summer holidays, supports the European Central Bank in its braking of interest rates. The ECB decided last week to pause the declines of interest rates in the euro area, and leave them at 2%, after eight cuts since June 2024, when they were at 4%. The monetary agency decided to stop until more information on the impact of the impact of a commercial war on the economy of the euro zone for Donald Trump tariffs.
Although the commercial agreement between the EU and the US is more detrimental to European interests and products, it is expected that the uncertainty that affects companies and that the trade has weighed, so the EU would face “a fairly marginal impact”, which could help stabilize prices in the medium term.
Source: www.eldiario.es
