Spain’s inflation rate has increased to 2.2% in June, new figures show.
The rise was driven largely by a resurgence in fuel and food prices, reigniting concerns about the durability of the country’s cost-of-living recovery.
It comes amid fears of further market instability due to the ongoing tensions in the Middle East, most worryingly war between the US, Israel and Iran.
The inflation uptick, revealed Thursday by the National Statistics Institute (INE), marks a modest but stubborn reversal from May’s 2.0% figure.
It comes just as Spanish households were beginning to feel a reprieve after nearly two years of volatile price hikes.
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Core inflation, which excludes energy and fresh food, remained at 2.9%, suggesting the underlying pressures in the economy haven’t gone away.
Public transport, hospitality, and leisure sectors – buoyed by robust summer demand – continue to inch prices upward.
While still within the European Central Bank’s (ECB) target band, the rise poses a political and fiscal headache for Pedro Sanchez’s government, which has championed Spain’s faster-than-EU average recovery from the pandemic-era price spiral.
Critics warn that wage growth in many sectors has not kept pace with these recent rises.
The INE’s breakdown reveals petrol prices surged 5.6% year-on-year in June, while basic foodstuffs like olive oil, eggs, and bread also recorded notable increases.
Meanwhile, ECB officials have signalled caution about cutting interest rates too aggressively, especially after similar inflation bumps in Germany and France.
