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Core inflation promises a protracted price crisis despite government measures

Inflation could have peaked last March. The CPI was close to 10% in one of the most complex months of…

By admin , in news , at May 7, 2022

Inflation could have peaked last March. The CPI was close to 10% in one of the most complex months of the year so far. The stability of the electricity price – at the limit of 200 euros/MW – and the entry into force of containment measures for the rest of the energies, managed to relax the index by 8.4%According to Advanced Estimates by INE.

However, there is a hidden fact which shows that the price crisis will continue with us for many more months. Core inflation – one that discounts the most volatile products such as energy or unprocessed food – continues to rise. According to the data, it may close at 4.4 percent in April., This figure shows a single digit increase in just one month.

The indicator promises a cryptic price bounce in the medium term, despite the effect that the executive intends to approve the gas cap next Tuesday, at the normal rate. The measure – the technical aspects of which are still being studied by Brussels – will cost less. pool Electricity, the main factor driving the index that measures prices.

However, if April closes with an underlying CPI of 4.4%, the European Central Bank (ECB) will move its vice president, it alerts, luis de guindoso, the figures show that inflation No matter how many measures are taken- will stick to the Spanish economy To weigh the pace reached in the last phase of the pandemic. Another reason for the Christine Lagarde-led institution to approve a hike in interest rates that manages to tackle the price crisis from a higher level.

The process will be slow, and Spain is not coping with it in the best way. Last Thursday, employers and unions gave break any possibility of compromise To customize Salary Group for the development of CPI. their currencies—totally opposites—approximate a loss of purchasing power by workers. Along with the wage revision clause in the event of high inflation, unions demanded a pay hike of 3.5% from employers for this year. The CEOE excluded this last requirement.

To this should be added the limited effect of the gas price cap on the actual bills of the consumers. Waiting to know the details, the key is in Who will take care of the subsidized portion Which means Iberian remedy. The executive – if it eventually has European backing – will have two possibilities.

Loading the cost on the shoulders of the users of the regulated rate, which will take away the savings from the gas limit. Or do it on all customers, both subscribed to PVPC and the free market. In this way, the latter will have to face the cost of the measure which will not benefit them, apart from the increase in contract which the power companies have already started transferring to them.