Saturday, September 18

The rise in electricity triggers the CPI in August to 3.3%, its highest in almost a decade

The spectacular rise in the electricity bill is having a full impact on inflation, with the consequent deterioration in the purchasing power of companies and individuals in full recovery. The Consumer Price Index (CPI) rose 0.4% in August compared to the previous month and placed its interannual rate at 3.3%, four tenths above that of July and the highest rate since October of 2012, according to advanced data published this Monday by the National Institute of Statistics (INE).

“In this behavior, the rise in electricity prices stands out, higher this month than in August of last year,” the agency said in a note.

August has settled so far with seven historical records in the price of the wholesale electricity market, the last one, this Monday, when the so-called pool will pulverize another maximum, standing at 124.45 euros per megawatt hour (MW / h) . This afternoon the third vice president and minister for the Ecological Transition, Teresa Ribera, will give explanations in Congress about this escalation, which is related to the rise in cost of natural gas and CO2 and has opened a debate on the need to reform the electricity market, forcing the Government to consider that a public company manage the hydroelectric concessions.

To the rise in the electricity bill, which this August will pay off with the most expensive bill in history for domestic consumers, is added the rise in other energy items, such as fuel: with oil above $ 70, gasoline accumulates an increase of 21.3% compared to a year ago, which in the case of diesel reaches 18.7%.

With the August data, the interannual CPI chains its eighth consecutive positive rate and continues at its highest levels since 2017. In monthly terms, the CPI has returned to positive rates, rising 0.4% in August, after falling 0 , 8% in July after adding four consecutive months of promotions.

The INE incorporates in the advance of CPI data an estimate of core inflation (excluding non-processed food and energy products), which rose one tenth to 0.7% in August, more than two and a half points below that of General CPI.

The agency, which will publish the final CPI data for August on September 14, has also published this Monday the General Export Price Index of industrial products for July, which registered a year-on-year increase of 10.4%, one point and a half above that registered in June and its biggest rebound since the start of the series, in January 2006.

For their part, the import prices of these products rose 12.9% compared to July 2020, a rate more than two and a half points higher than the previous month and the highest also since January 2006.

This inflationary scenario comes while the Government finalizes the opening of negotiations with the social agents for the increase in the minimum interprofessional wage (SMI) and awaiting the effect on the public coffers that the rise in prices as a result of the revaluation of pensions .

The shortage of many raw materials in parallel with the recovery of the world economy, the supply problems of some technological components, such as semi-conductors, and the inflationary pressures derived from the increase in the costs of transporting containers from Asia have already led to many large Spanish companies to include various warnings in this regard in their results for the first half of the year, although at that time the inflationary scenario was venturing as something temporary.

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