CONSUMERS in Spain have been dealt a blow after the rate of inflation soared to its highest level in more than three years last month.
According to figures confirmed on Tuesday by the National Statistics Institute (INE), inflation hit 4.3 per cent in August – an increase of seven-tenths of a percentage point from July.
The figure is also the highest year-on-year level recorded in Spain since February 2023.
The primary driver of the increase is rising energy costs, with the ongoing war in Iran and the resulting congestion of key trade routes including the Strait of Hormuz pushing up the price of fuel, including petrol and diesel.
Earlier this month, petrol prices in Spain hit their highest level since the conflict in the Middle East began in March, with the increase partially caused by the government phasing-out a cut in VAT on fuel intended to soften the blow for motorists.
The impact of rising fuel costs, with the price of a barrel of crude oil back above $100 (€86), is best evidenced by the rate of core inflation, which excludes energy and unprocessed food.
According to the INE, core inflation stood at 2.9 per cent in August, one-tenth of a percentage point lower than this time last year.
However, that remains well above the European Central Bank’s (ECB) target of 2 per cent.
Food and non-alcoholic beverage inflation, meanwhile, remained at an annual rate of 2.3 per cent.
The finance ministry said the government is ‘maintaining a minute-by-minute monitoring of the impact of the conflict in Iran on the Spanish economy, hand-in-hand with social agencies and the most affected sectors’.
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