Underlying inflation rose by 0.2% to 1.3%. However, this increase will be temporary in nature because it is mainly due to a "base effect" caused by the strong decline in the cost of tobacco twelve months ago and the stability last June.
The month-on-month decline to the CPI in June can be explained by the falling prices of energy products and non-energy industrial goods. Energy product prices fell by 2.4% and were heavily influenced by price trends in their main component (solid and liquid fuels), which fell by 3.3%. The cost of non-energy industrial products fell by 0.3%. This was due to a drop in clothing and footwear prices (0.9%) because some businesses have started their summer sales early (in June).
The cost of fresh food products rose by 1.2% due to the strong price increase in fresh fruit (9.4%), which offset the falling prices of fresh vegetables (3.4%) and lamb (1.1%). On the other hand, prepared food product prices remained unchanged from the previous month and the price of services rose by 0.3% on May, mainly due to interurban transport (0.9%) and tourism, hotels and catering (0.6%).
The price of food products (both prepared and unprepared) and services continue their pace of growth on the figures recorded a year ago. The largest increase was recorded by prepared food products (whose year-on-year rate of growth rose by 0.8% to 3.8%) and fresh food (up to 2.5% from 1.1% in May). This increase in the largest component is the result of a combination between tobacco price stability in June and a 6.4% drop a year ago. The year-on-year rate of service price growth rose by 0.1% (to 1.2%), with urban public transport (9.5%) and interurban public transport (4.2%) showing the highest rates of growth.
On the other hand, it is worth noting the slowing of year-on-year growth for energy product prices (from 8.3% in May to 6.2% in June). This is due to the easing of solid and liquid fuel prices and those of non-energy industrial goods, which levelled out from a growth rate of 0.2% in May to 0.1% in June (caused by lower clothing and footwear prices).
The stability seen in the year-on-year rate of growth for the general index in June should be viewed positively as this is happening in spite of rising tobacco prices, which have an almost 0.2% influence on inflation. In the absence of this tobacco effect, underlying inflation would have remained unchanged at the 1.1% recorded in May.
The National Institute for Statistics (Spanish acronym: INE) also published the standardised CPI (SCPI) for June, the year-on-year rate of which stands at 1.8% or 0.1% below the figure recorded in the previous month. This rate coincides with that of the SCPI indicator published on 28 June. When compared with the estimated year-on-year rate for the Eurozone, the difference remains in Spain's favour at 0.6% (compared with -0.5% in the previous month).