Spanish inflation accelerated for a second month as the government continued to remove support that had helped contain rising energy costs.
Consumer prices rose 3.4% year-on-year in April, data released Monday showed. This is in line with the median estimate from a Bloomberg survey of economists.
Excluding energy and some food costs, core inflation fell more than expected to 2.9%, the lowest since early 2022.
The Spanish figures kick off a run of data across the eurozone, and German inflation later on Monday is also expected to accelerate slightly. The region as a whole is expected to register a reading of 2.4%, holding steady for the first time this year, although a Bloomberg Economics nowcast model suggests it could fall to 2.3%.
The European Central Bank has warned that the indicator will fluctuate in the coming months as base effects come into effect. That won't stop policymakers from cutting interest rates at their next meeting in June, although what happens next is up in the air.
“The downward trajectory of Spanish price growth has been bumpy this year and another rise is likely in May, driven by base effects. After the spring, however, inflation should more firmly resume its downward trend.”
For Spain, where the government has been cutting some subsidies, this week's economic data, which also includes first-quarter production, is taking a backseat to the political drama unfolding in Madrid. After suggesting that he might resign, Prime Minister Pedro Sánchez announced on Monday that he will remain in his position.