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Energy prices drive up inflation in Spain in September

Spanish inflation jumped in September due mainly to higher electricity and fuel prices, preliminary data showed Thursday.

Published: 28 September 2023 10:51 CEST
Energy prices drive up inflation in Spain in September
The Bank of Spain warned last week that inflation will be faster than it had anticipated this year and next due to a pickup in oil prices that will also drag down economic expansion. (Photo by ANDER GILLENEA / AFP)

Consumer prices rose 3.5 percent year-on-year, figures from the National Statistics Institute (INE) showed, up from 2.6 percent in August.

Spanish inflation has been rising again since falling to 1.9 percent in June, just below the European Central Bank’s two-percent target. It stood at 2.6 percent in August.

The increase in prices in September was due mainly to a rebound in electricity prices, which had fallen in September 2022, and to a lesser extent to an uptick in fuel prices, INE said in a statement.

Spanish inflation soared after Russia’s invasion of Ukraine, hitting a record 10.8 percent in July 2022, its highest level since 1985.

Acting Prime Minister Pedro Sánchez’s leftist government has implemented a series of measures to curb inflation, including free commuter rail travel and scrapping the value-added tax on basic food items.

He is trying to cobble together enough support among smaller parties to stay in power following an inconclusive early general election in July.

The Bank of Spain warned last week that inflation will be faster than it had anticipated this year and next due to a pickup in oil prices that will also drag down economic expansion.

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BANKING

Spain’s govt vows to block BBVA’s hostile bid for rival Sabadell

Spain's Economy and Labour ministers said Thursday they opposed the hostile takeover bid launched by BBVA bank for its smaller rival Sabadell, saying the government would have the final say in the operation.

Published: 9 May 2024 12:08 CEST
Spain's govt vows to block BBVA's hostile bid for rival Sabadell

Spain’s second-largest bank BBVA announced Thursday a hostile takeover bid for smaller rival Banco Sabadell but the government vowed to block the move, which would create a European giant in the sector.

BBVA’s new bid came three days after Sabadell’s board of directors rejected a merger proposal, saying it was “not in the best interest” of the bank.

The takeover proposal values Sabadell, Spain’s fourth-largest banking group in terms of capitalisation, at nearly €11.5 billion ($12.3 billion).

“The operation will create one of the best banks in Europe,” BBVA said in a statement.

But Prime Minister Pedro Sánchez’s leftist government swiftly came out against the move, as did the regional government of Catalonia where Sabadell was born and where it has a strong presence.

Labour Minister Yolanda Díaz said it was against Spain’s “interests” because it “would destroy many jobs”.

Economy Minister Carlos Cuerpo warned the government “will have the last word when it comes to authorising the operation” which he said would be “potentially damaging”..

The head of the regional government of Catalonia, Pere Aragonès, echoed these concerns, telling Spanish public television the takeover would “affect many jobs in Catalonia”.

Aragonès is facing a regional election in Catalonia on Sunday, with polls showing he is trailing.

READ ALSO: Why regional elections in Catalonia matter to Spain’s future

The takeover would be carried out under same conditions as the initial approach — an exchange of one new BBVA share for every 4.83 Sabadell shares, a 30-percent premium over the April 29th closing price of both banks, BBVA said.

“We are presenting to Banco Sabadell’s shareholders an extraordinarily attractive offer to create a bank with greater scale in one of our most important markets,” BBVA Chair Carlos Torres Vila said in the statement.

A takeover would create a banking powerhouse capable of competing with Santander – Spain’s leading bank – as well as with European giants such as HSBC and BNP Paribas.

BBVA, which also has operations in Mexico, Argentina and Turkey, is Spain’s second-largest banking group in terms of capitalisation and has 74.1 million customers.

Sabadell operates in 14 countries and has nearly 20 million customers.

The bank had said on Monday that the initial offer “significantly undervalues the potential of Banco Sabadell and its standalone growth prospects”.

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