The Consumer Price Index (CPI) broke four months of moderation in October by advancing 1.8% year-on-year, three tenths more than it did in September, when it reached its lowest level since March 2021. Likewise, this reading implies that inflation will resume its rise after having chained four consecutive months of declines. Core inflation (the index without fresh food and energy products) also advanced more than it did the previous month to stand one tenth higher, at 2.5%.
The increase in the general CPI, one tenth above that expected by the consensus of economists, was “mainly due to the increase in fuel prices and the rise in electricity and gas prices, compared to the decrease they experienced in October 2023, as indicated by the INE in its note published this Thursday. However, inflation remains below the 2% objective set by the European Central Bank (ECB).
It is worth remembering that, in addition, in October the VAT on reduced basic products increased to 7.5% and on super-reduced products – which has included olive oil since July – up to 2% (from 5% the first and from 0% the second), levels at which they will remain until January, when they will return to their usual rates of 10% and 4%).
The monthly increase was more relevant. From September to October, the CPI increased 0.6% compared to the previous month, its largest month-on-month increase since April, when it increased 0.7%. In this case, the increase in prices is explained by the 8.5% increase in the cost of the clothing and footwear group due to the change of wardrobe to autumn-winter as well as the increase in the price of food by 1.4% per the increase in the price of fruits and legumes and vegetables.
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