Inflation in Spain at 4.9% in September, highest since February 2023

Inflation heated up in Spain in September at 4.9% year-on-year, according to preliminary data from Spain's National Institute of Statistics (INE). The figure marks an increase of six tenths compared to August and is the highest level since February 2023, which was triggered by the start of the invasion of Ukraine.

Core inflation, which excludes energy and fresh food prices, also accelerated, rising to 3.1%, two tenths more than the previous month.

According to the Spanish Ministry of Economy, the main cause of the increase is the increase in fuel prices, linked to the continuation of the energy shock caused by the war in Iran.

Given the increase in inflation, today's Council of Ministers is expected to approve a decree to extend the shield to contain the impact of the price increase, including a limitation of the last resort gas tariff and interventions on the price of butane, as well as aid for the agricultural and transport sectors to limit the second round effects on other prices. The government's fiscal space, as reported by the executive, is however reduced after the two previous packages of measures in March and July, the latter expiring today.