Inflation adds to Spain's woes

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Inflation adds to Spain's woes

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There is more economic pain for the people of Spain in the form of higher inflation.

Consumer prices surged in August for the second month running.

They were driven up mostly by higher fuel costs.

The latest numbers will complicate Madrid’s efforts to dig Spain out of recession and generate the growth needed to reduce the country’s debts.

Inflation – using EU-harmonised calculations – rose by 2.7 percent year-on-year in August, up from 2.2 percent in July.

Economists had expected an unchanged reading.

Prices are set to rise further. From Saturday September 1st, value-added tax goes up to 21 percent from 18 percent as part of government austerity measures.

That will put further pressure on Spanish consumers who are already struggling under the weight of falling wages and with nearly one in four Spaniards out of work.