- Spain October final CPI +4.9% vs +4.9% y/y prelim
- Prior +4.9%
- Spain October final HICP +4.9% vs +4.9% y/y prelim
- Prior +5.0%
- Spain October core CPI +3.1% y/y
- Prior +3.1%
No changes to the preliminary estimates as the final report here reaffirms that Spanish inflation remains stubborn with headline prices keeping near 5% in October. The latest drop in energy prices over the past week or so might help eventually but it will take some time to filter through to the economy.
But for now, inflation pressures are at a rather uncomfortable level for Spain indubitably.
Besides that, core annual inflation is reaffirmed at 3.1% in October and that is unchanged from September. Even so, it is still well above what the ECB would be comfortable with as price pressures continue to pull away from the 2% target.
Alongside the French report from earlier, this just continues to reaffirm that the inflation monster is still a major threat that the ECB has to deal with heading into the final stages of this year.
As things stand, markets are pricing in roughly 82% odds of the ECB making another move in December. For policymakers, they might very well have to go with the flow amid fears that flagging economic growth conditions could make their jobs much tougher come next year.
In the grand scheme of things, it’s not a good look for the ECB as they have quite a tough balancing act to work with. On the one hand, they have to deal with more persistent price pressures before they get out of control. On the other, they have to avoid sending the broader economy off a cliff. Tough.
This article was written by Justin Low at investinglive.com.
