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A significant increase in inflation
In November, Spain experienced an acceleration in inflation, which reached 2.4% year-on-year. This increase represents the fastest growth rate since last August, according to data provided by the national statistical agency. Compared to 1.8% in October, the November figure shows a recovery in consumer prices, which surprised many analysts
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Price pressures and the ECB’s forecasts
Despite rising inflation, a key indicator of underlying pressures, which excludes energy and certain foods, showed a slight decline, falling to 2.4% from 2.5%.
This result contradicts expectations of an increase of 2.6%. European Central Bank (ECB) officials had forecast a temporary increase in inflation across Europe, with the goal of sustainably keeping the rate at 2% in the coming year
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Implications for the Spanish economy
The Spanish data are the first of this month from an important eurozone economy. Germany will publish its data later, and analysts estimate a 2.3% price increase in November. The ECB is expecting a fourth reduction in the deposit rate, bringing it to 3%, while further monetary easing could take place in 2025. However, ECB officials, such as Isabel Schnabel, warn against reducing financing costs too much
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Factors that influence inflation
In Spain, the increase in inflation was attributed to energy and fuel costs, which had plummeted towards the end of 2023. Despite this, the country maintained relatively low inflation in the previous months, recording increases of less than 2%. Spain has demonstrated robust growth compared to other economies in the region, thanks also to government policies that have included consumer support measures
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Future Prospects and Economic Signals
An indicator of Spanish economic health is unemployment, which is at an all-time low in the last 15 years. This has led to an increase in wages and an increase in the prices of services, an aspect that continues to worry the ECB. In the current context, European stock exchanges, including Piazza Affari, opened above parity, while Wall Street will remain closed for Thanksgiving
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Market activity and acquisitions
In a context of economic growth, BlackRock is about to acquire the private credit group HPS Investment Partners for about 12 billion dollars. In addition, Cassa Depositi e Presitti (CDP) is considering the purchase of Nexi’s Network Services unit, according to press sources. These developments highlight a growing interest in strategic investments in the European market
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