Spanish inflation accelerated for a second month, demonstrating the persistent price pressures that the European Central Bank’s higher-for-longer approach to interest rates is seeking to stamp out.
September’s reading of 3.2% was due to electricity and fuel costs, the national statistics institute said Thursday. That compares with 2.4% a month earlier is just shy of the 3.3% median estimate in a Bloomberg survey of economists. The Bank of Spain predicts it will continue to quicken next year.
A measure of underlying pressures that excludes energy and fresh food costs fell more than anticipated, to 5.8%.
The ECB lifted borrowing costs for a 10th straight meeting this month — a move economists and investors think was the final hike in an unprecedented campaign to drag inflation back to 2%.
Some policymakers agree: Bank of Spain Governor Pablo Hernandez de Cos has said price gains should return to that target if rates are kept at current levels for a prolonged period. Others, like Austria’s Robert Holzmann, warn that shocks such as oil hitting $100 a barrel could yet warrant additional monetary tightening.
Both are set to speak later Thursday.
Spain’s figures kick off a spate of inflation data from across Europe, with early regional data from Germany pointing to a steep national slowdown. For the 20-nation euro zone as a whole, the retreat will be less pronounced. Analysts see a moderation to 4.5% from 5.2% when numbers are released on Friday.
Read More: Euro-Zone Inflation Holds Key to Length of ECB Rate Squeeze
While Spain boasts one of the continent’s lowest inflation rates, its central bank recently boosted the outlook for this year and next. Citing a pickup in the cost of oil, it said it now sees consumer prices rising by 3.6% in 2023 and 4.3% in 2024.
--With assistance from Ainhoa Goyeneche and Joel Rinneby.
