Spanish inflation quickens as energy subsidies withdrawn

Spanish inflation rose for the second consecutive month, hitting 3.4 per cent in April, as the government phased out support measures that had previously suppressed escalating energy costs, Bloomberg reported on Monday.

When excluding energy and certain food costs, core inflation unexpectedly fell to 2.9 per cent, the lowest since early 2022.

The latest data initiate a series of reports across the eurozone, with German inflation expected to slightly rise later on Monday, while the region’s overall inflation is projected to remain steady at 2.4 per cent for the first time this year.

The European Central Bank (ECB) warns of potential fluctuations in these figures in the coming months due to base effects, but this won’t deter a planned interest rate cut in June.

Amid these economic updates, Spain, which has been reducing some subsidies and is set to release first-quarter output data this week, is also dealing with political developments in Madrid.

Prime Minister Pedro Sanchez is due to announce his decision on whether to continue in his role at noon on Monday, potentially triggering a new general election if he chooses to step down.