Energy prices push Spanish inflation higher in March: Cause for ECB concern?

A Spanish flag flies above part of the Madrid skyline, Monday July 2, 2012.
A Spanish flag flies above part of the Madrid skyline, Monday July 2, 2012. Copyright Paul White/AP
By Doloresz Katanich
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Year-on-year inflation, as measured by the Consumer Price Index (CPI), increased by 3.2% in March, while core inflation, which excludes energy and unprocessed food, fell to 3.3% in Spain.

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Spanish inflation picked up in March, consumer prices rose by 3.2% compared to the previous year, following the previous month's 2.8%, according to a flash estimate from the National Statistics Institute (INE). 

The EU-harmonised CPI in Spain rose by 1.3% in March compared to the previous month, following a 0.4% increase in February. 

The higher inflation figures are mainly due to an increase in electricity and fuel prices, while the prices of food and non-alcoholic beverages increased at a slower pace than in the same month last year. 

However, core inflation, excluding food and energy, slowed to 3.3% from the previous month's 3.5%, marking the lowest level since February 2022, which will likely come as a relief to the European Central Bank (ECB). 

Annual inflation in the EU and eurozone continues to show signs of easing with the annual inflation rate in the bloc sharing the euro was 2.6% in February, down from 2.8% in January and 2.9% in December 2023. The ECB's inflation target is 2%.

Inflation among the biggest eurozone economies is the most closely watched indicator for the ECB, before it starts lowering the benchmark interest rate, a step expected to happen in June.

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