Spanish inflation falls

 

The Spanish level of inflation for June fell to the lowest it has been for 5 months, as the economy is still struggling to pull away from a three-year slump.

The National Institute of Statistics (INE) earlier today reported how consumer prices increased by 3% on June 2010. The rate dropped from 3.4% last month - the biggest fall since last June. Inflation was 3.2 percent according to the Spanish measure of prices, the institute said.

Crude-oil prices have dropped 17% since their 2011 high of $114 on April 29 and retail sales fell 6.6% in May from a year earlier. Clothes shops held sales offering 50% discounts in the last days of June while the prices of manufactured good fell, due largely to falling energy costs.

The Spanish inflation rate jumped to 2.8% in September and reached a 2 year high of 3.5% in April. The rate fell outside the euro-region average of 2.7% last month.

Earlier this month the ECB spoke of raising the 1.25% benchmark lending rate next month given that the euro-area inflation rate has remained above the 2% ceiling since the start of the year.