Spain’s flash headline inflation seems to have recovered in August

Spain’s flash headline inflation is expected to have recovered in August. The harmonised index of consumer prices is likely to have jumped to -0.3 percent year-on-year in August from -0.7 percent year-on-year in July, said Societe Generale in a research note.

The energy component is expected to have posted another monthly drop in August; however, it is expected to have improved on a tear-on-year basis, reflecting the impact of base effects.

Meanwhile, food prices are expected to have moderated slightly in August following an improvement in July to nearly a three-year high. Core inflation is expected to have improved slightly for the second consecutive month after being stable for three months in a row until June, according to Societe Generale.

“Going forward, Spanish HICP inflation is likely to exit negative territory in September, led by base effects from energy prices”, added Societe Generale.