SHARE
COPY LINK

ECONOMY

Energy costs push Spain’s inflation to 29-year high

Spanish consumer prices rose at their fastest pace since 1992 in October on the back of higher energy prices, official data showed Thursday.

a cashier and a customer at a supermarket in spain
Food prices, together with fuel and energy bills, are where people in Spain are noticing price rises most. Photo: Gabriel Buoys/AFP

Inflation climbed year on year by 5.5 percent, accelerating from a 4.0 percent increase in September, national statistics institute INE said.

That is its fastest pace in 29 years, since September 1992, when the rate was 5.8 percent.

The surge in inflation in the eurozone’s fourth-largest economy was due largely to a spike in the price of electricity, and to a lesser extent to higher gas prices, it added.

Bank of Spain governor Pablo Hernández de Cos warned Monday that higher inflation rates are likely to be seen over the coming months since high energy prices are likely to last through the winter as demand rises due to colder weather.

As in other European Union nations, inflation in Spain has risen since the start of the year after consumer prices declined during most of 2020 due to the economic impact of pandemic lockdowns.

READ ALSO: The cheapest supermarket in your province in Spain

The European Central Bank (ECB) expects inflation will rise by 2.2 percent in the entire 19-country single currency area this year, above its target of 2.0 percent.

It has insisted that the inflation spike is “temporary” in nature, driven by one-off pandemic-related effects that will gradually dissipate over the course of 2022.

READ ALSO:

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

MONEY

Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.

SHOW COMMENTS