- July preliminary CPI +3.5% vs +3.4% y/y expected
- Prior +3.2%
- July preliminary HICP +3.8% vs +3.7% y/y expeced
- Prior +3.6%
Headline annual inflation continues to accelerate in Spain with the monthly change even reflecting a 0.2% increase. This now marks the sixth straight monthly increase in headline inflation, which follows from the 0.6% jump in June as well. That’s a worrying signal as energy prices are now starting to come back up again and could threaten to reverberate more broadly.
Adding to the concern is that core annual inflation is estimated to move up to 3.0% in July as well. That is up from the 2.9% estimate in June.
It’s not quite a good start to the set of inflation data we’ll be getting today. The ECB may have signaled a pause in July but things certainly look like they will be heating up ahead of the September meeting next.
And if the inflation trend stays as it is, it will be hard to ignore the need for another rate hike by the time the summer break ends.
This article was written by Justin Low at investinglive.com.