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

The Consumer Price Index (CPI) increased in October by 0.7% year-on-year, after 0.2% recorded 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 interannual 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 inter-monthly terms, the general CPI increased 1.1% in October, five tenths more than in the same month of 2015.

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

Food inflation in October stands at 0.3%, four tenths lower than the previous month, mainly due to the slowdown in prices of unprocessed foods, whose rate has been reduced by one percentage point, to stand in 0.2%. This evolution responds, mainly, to the slowdown in the prices of fresh fruits, almost four points, to 0.9%. The prices of processed food slow down to a lesser extent, one tenth to 0.4% year-on-year.

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

In month-on-month terms, the CPI grew 1.1% in October, half a point more than in the same month of 2015. By components, the prices of energy products increased 3.8%, after a 1.3% decrease in a year earlier, those of services were reduced by 0.3%, as in the same month of 2015, those of the BINE increased by 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, prices of unprocessed foods rose 0.4% month-on-month in October, nine tenths less than in the same month of 2015, while those for processed foods stabilized, compared with the rise of 0 , 1% a year earlier. The reduction in the prices of fresh fruits (-0.1%), as opposed to the 3.8% rise a year earlier, stands out in unprocessed food.

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

The interannual rate of the CPI to constant taxes stood at 0.7% in October, as was the general CPI.

The INE has also published the harmonized CPI (IPCA) corresponding to the month of October, whose interannual variation rate is positive, increasing 0.5%, after the stabilization of September. The rate advanced by Eurostat for the euro zone as a whole is also 0.5%, thus canceling Spain's inflation differential with respect to the euro zone.

In summary, the year-on-year rate of the CPI increased half a point in October, reaching 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 against the euro zone is canceled.



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