SPAIN’S inflation rate has hit its highest mark since September 2008 due mainly to rising power prices.
The National Statistics Institute(INE) said this Thursday that last month’s rate stood at 4%, as opposed to August’s 3.3%.
The INE said electricity bills went up by nearly 11% in September and have risen by 44% over 12 months.
But for the government intervening to slash taxes on domestic power bills, power prices would have risen by 61% resulting in an inflation rate of 4.5%.
There is no immediate prospect of an inflation slowdown as wholesale electricity prices continue to rise and business users will almost certainly pass on some of their increased costs to consumers.
Spain has taken more radical action than its European Union counterparts to buffer consumers against bill hikes.
It’s tried to persuade the EU to take regional action but it has not been satisfied with the response so far.
The EU set out proposals on Wednesday to help the most vulnerable citizens and companies from the unprecedented surge in prices.
Spain’s Ecological Transition minister, Teresa Ribera, said “The proposals don’t address the exceptional nature of the situation we’re in, with exceptional measures to meet the challenge we have ahead.”
“It would be a shame if Europe doesn’t rise to the challenge, trying to correct and contain the bleeding that would occur in the broader European economy if it doesn’t react,” Ribera added.
Image Credit Cordon Press