Spanish Inflation Declines as Summer Pressures Cool

By Ed Frankl

Spanish inflation came in well below forecast in September, signaling pressures are cooling and likely raising calls for the European Central Bank to accelerate its interest-rate easing cycle.

Consumer prices rose 1.7% on year in this month, according to EU-harmonized figures published by Spanish statistics agency INE on Friday, a sharp fall from the 2.4% registered in August. Economists expected the rate to fall more gradually, to 2.0%.

Declining fuel prices drove the cooling of inflation, though food and electricity also, to a lesser extent, helped the decline, INE said.

Easing core inflation--which strips out more volatile food and energy prices--also likely showed that September marked the softening of the inflationary push from the services sector, a strong component in the summer from Spain's key tourism industry.

The European Central Bank cut rates at its last meeting earlier in September, and while it signaled that it would likely hold at its next meeting in October, inflation undercutting expectations--and falling well below its 2% target--in its major member nations could prompt it to move sooner.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

September 27, 2024 03:21 ET (07:21 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.