Spain’s inflation went down for a second month and by more than expected, dropping to less than 10% as the cost of electricity, transportation, and fuel went down. Spain has the fourth-largest economy in the eurozone.
Harmonized consumer prices in the European Union went up 9.3% from a year ago in September. This was less than the 10.5% increase in August, which was reported by the statistics institute on Thursday. A Bloomberg poll of economists found that the average estimate was 10%, so this is a lot less than that.
In more good news, a measure of underlying prices that don’t include volatile items like energy and food fell by 6.2%, which was not what was expected.
Spanish Inflation Eases:
The data could be a relief for the European Central Bank, which has started raising interest rates for the first time in more than a decade to deal with the fastest inflation since the euro was introduced.
Still, Germany, which has the largest economy on the continent, will release numbers on Thursday evening that are likely to show a jump of more than 10% after temporary government support measures ended. On Friday, the eurozone is likely to set another record.
Spain’s economy is still being hurt by rising prices. Governor Pablo Hernandez de Cos says that the central bank is likely to cut its predictions for economic growth while raising its predictions for inflation.
Polls show that Prime Minister Pedro Sanchez’s popularity is falling, so he is thinking about raising taxes on the wealthiest 1% to pay for more than €30 billion ($28.8 billion) in help for households and businesses. His party is also proposing that energy companies and banks pay a new tax.
In an interview with the Austrian newspaper Der Standard this week, the head of the European Central Bank’s (ECB) economics department, Philip Lane, suggested that rich people and corporations that make a lot of money could be taxed to help pay for aid packages for the poor.
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