Inflation thus continues a stable trend at the beginning of the last quarter of the year, at the same percentage with which it closed September.
Last month the evolution of the price of electricity rose, which fell less than in October 2022, as did fuel and food and non-alcoholic beverages, which rose but also less than a year ago on the same dates.
The price of food moderated to 9.5%, one point less, since legumes and vegetables, milk, eggs and cheese, meat and fruits rose less than in October of last year, although oils and fats become more expensive than in October 2022. This trend increased the costs associated with housing, among which the electricity bill has the greatest weight, which, despite being in negative territory (-7.7%), rises by almost five points and a half year-on-year in the last month and pushes the CPI up.
This is explained by the end of the so-called step effect that occurred in the summer months, when the CPI fell to 1.9%, and which occurs when prices grow a lot and quickly in a short period of time. and they drop abruptly, as happened last year after the war in Ukraine.
The general rate does not rise as much because, in addition to food, transportation inflation is also moderating, which is 1.4% more expensive year-on-year, almost two and a half points less due to the decrease in the prices of fuels and lubricants for personal vehicles. , which rose in the same month of 2022.
However, it is expected to rise again in the coming months to year-on-year increases of 5% if, among other measures, aid such as the reduction in VAT or aid to public transport begins to be mitigated.
The INE confirms the rest of the advance inflation data: the annual rate of core inflation decreases six tenths to 5.2%, in a month-on-month rate (October prices compared to September prices) it advances three tenths, now five consecutive months of monthly increases. In the case of the underlying, which does not take into account the more volatile variation in energy and fresh food prices, it confirms its third month of decline to the lowest levels since May 2022.
The Harmonized Consumer Price Index (HICP), which uses statistics to average the rest of European statistics (Eurostat), places its annual rate the same as general inflation, at 3.5%, two tenths more than the previous figure and The reduction of the differential with respect to the eurozone, favorable to Spain, continues. Both the general rate and the underlying rate moved in the expected direction, up and down, respectively, although both were one tenth lower than expected. This slight deviation is due to a better result of most of the underlying components.
Funcas pointed out with the September data that during the coming months the step effect, which is already being observed, on the energy inflation rate will worsen, which will mean that the general inflation rate will continue to rise. The underlying rate, on the other hand, will continue its slow downward trajectory.
“The general inflation rate expected for December of this year is 4.8% with an annual average of 3.8%. For 2024, an average rate of 3.6% is expected in the general index and 3% for the underlying one, according to these latest forecasts, which do not include the impact of a possible withdrawal of the measures introduced in response to the energy crisis – such as the reduction of VAT on electricity and some basic foods and the subsidy of public transport -, in force “, in principle, until December 31, 2023. It is estimated that, from the moment in which said withdrawal occurs, the interannual rate could be around three tenths of a percentage.”
