• The increase in the index is due to the rise in energy prices, which are growing for the first time since July 2014
  • Core inflation stabilizes at 0.8% and the price differential with the rest of the euro area is canceled

The Consumer Price Index (CPI) increased by 0.7% in the interannual rate in October, after the 0.2% registered in September, according to figures published by the National Statistics Institute (INE). This rate coincides with that advanced by the INE at the end of last month. The increase in the annual rate of the CPI is due to the behavior of the prices of energy products, which grew for the first time since July 2014. In month-on-month terms, the general CPI increased by 1.1% in October, five tenths more than in the same month of 2015.

The prices of energy products rose slightly in October in interannual terms, 0.1%, compared to the 4.8% decrease registered in September. This evolution is explained both by the moderation in the rate of decrease in fuel and fuel prices (-0.3%, compared to the 4.3% decrease in the previous month) and by the increase in electricity prices, 1%, after the decrease of 6.7% in the previous month.

Food inflation stood at 0.3% in October, four tenths lower than the previous month, mainly due to the slowdown in the prices of unprocessed food, the rate of which has decreased by one percentage point, to stand at at 0.2%. This evolution responds, mainly, to the deceleration of the prices of fresh fruits, almost four points, up to 0.9%. The prices of processed food slowed to a lesser extent, one tenth to 0.4% year-on-year.

Core inflation (excluding the most volatile CPI elements, unprocessed food and energy) remained at 0.8% in October, due to the slight acceleration in service prices, one tenth to 1.1%, It was offset by a slowdown of the same magnitude in the prices of processed food (up to 0.4%) and of non-energy industrial goods (up to 0.6%).

In month-on-month terms, the CPI grew by 1.1% in October, half a point more than the same month in 2015. By component, the prices of energy products increased by 3.8%, after the 1.3% decrease in a year earlier, services decreased by 0.3%, as in the same month of 2015, those of BINE increased 3.1%, one tenth less than in October of last year, and those of food they grew 0.1%, four tenths less than a year earlier.

Within the food group, the prices of unprocessed food increased by 0.4% month-on-month in October, nine tenths less than in the same month of 2015, while those of processed food stabilized, compared to the rise of 0 , 1% from a year before. Of note, within unprocessed food, the reduction in the prices of fresh fruits (-0.1%), compared to the 3.8% rise a year earlier.

The interannual rate of the CPI increased in October in all the autonomous communities, reaching positive levels in all of them. The highest inflation rates were registered in Asturias and Navarra (1% both) and Catalonia (0.9%), and the lowest, in La Rioja (0.3%) and the Valencian Community (0.4%).

The annual rate of the CPI at constant taxes stood at 0.7% in October, as did the general CPI.

The INE has also published the harmonized CPI (HICP) for the month of October, whose year-on-year rate of change is positive, increasing by 0.5%, after stabilizing in September. The rate advanced by Eurostat for the euro area as a whole is also 0.5%, thus canceling out Spain's inflation differential with respect to the euro area.

In summary, the year-on-year CPI rate increased by half a point in October, to stand at 0.7%, mainly due to the increase in energy prices, after the decrease in the same month last year. Core inflation remains at 0.8% and Spain's inflation differential vis-à-vis the euro area is nullified.

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