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ECONOMY

Spain’s inflation soars to 29-year high

Spanish inflation accelerated in November to its highest level in nearly three decades on the back of rising food and gas prices, official data showed Monday.

black friday spain
Black Friday sales can't disguise the fact for shoppers that life in Spain is getting increasingly expensive. Photo: GABRIEL BOUYS / AFP

Consumer prices jumped by 5.6 percent, up from a 5.4 percent increase in October, according to preliminary figures from national statistics institute.

That is its fastest pace 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 food prices, followed by higher gas prices, the statistics office said.

Electricity costs, however, declined slightly after a month-long acceleration, it added.

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.

In October, eurozone inflation reached 4.1 percent, well above the European Central Bank’s target of two percent and equal to a high set in July 2008.

But the bank believes eurozone inflation will peak in November and is set to gradually slow next year as supply bottlenecks and the energy crunch ease, board member Isabel Schnabel said earlier this month.

Investors worry central banks will withdraw their stimulus measures sooner than expected to tame inflation.

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ECONOMY

Swiss central bank announces big rate hike in inflation fight

The Swiss National Bank (SNB) raises the key interest rate by 0.75 percentage points, putting it back in positive territory at 0.5 percent.

Swiss central bank announces big rate hike in inflation fight

“The rate change applies from tomorrow, September 23rd 2022”, SNB said in a press release on Thursday.

It added that “inflation [in Switzerland] rose to 3.5 percent in August and is likely to remain at an elevated level for the time being”.

The latest rise in inflation is principally due to higher prices for goods, especially energy and food, according to the bank.

The SNB’s forecast for the evolution of inflation is, however, positive.

It forecasts that the rate will drop to 2.4 percent in 2023 and and 1.7 percent for 2024.

“Without today’s SNB policy rate increase, the inflation forecast would be significantly higher”, the bank said.

In mid-June, the SNB tightened interest rates by half a percentage point for the first time in 15  years. Since then, inflation in Switzerland has continued to rise. For August 2022, the statisticians reported inflation of 3.5 percent, after 3.4 percent in June and July.

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