Spanish inflation at 29 year high

Electricity and fuel prices continue to rise with Spanish inflation

Bottlenecks in global production caused by the pandemic and rising energy costs are continuing to increase prices for consumers all over the country. There is a large worry that many households will end up under severe pressure to make ends meet this Christmas season due to this Spanish inflation.

The Consumer Price Index (CPI) had a huge increase in October, reaching a high of 5.4%, the highest price increase recorded in 29 years. 

The massive rise in energy costs is the main contributing factor to this Spanish inflation, with some household electricity bills costing 62.8% more last month than during the same period in the previous year. Fuel is now 28.6% more expensive in 2021, this is the highest price in four years. 

Food is not immune from these increases either, with staples of the Spanish diet such as olive oil turning up a 26% price rise. Fresh fruit also rose by 11.3%.

Natural gas has received a knock-on effect from the soaring price of electricity as more and more people are turning to this method to heat their homes as the winter nights draw in. This has caused an 11.3% increase. The same has happened with bicycles due to the huge cost of petrol and diesel, with push bikes registering a 7.6% price jump. 

Analysts from the Bank of Spain have warned that inflation will continue to increase well into next year. This could cause consumers to lose purchasing power in the home economy. A loss of purchasing power for Spain’s residents could result in a slow-down in Spain’s economic recovery as 90% of the growth needed depends on domestic demand.

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