Services Still Sticky As Spain HICP Revised A Tenth Higher

Spanish June Y/Y and M/M HICP was revised a tenth higher on a rounded basis, to 3.6% Y/Y and 0.4% M/M.

• HICP excluding energy and unprocessed foods remained sticky at 3.2% Y/Y in June, with services HICP ticking a tenth higher to 4.0% Y/Y (vs 3.9% prior).
• The recreation and culture component rose 3.8% Y/Y (vs 3.7% prior), in line with the brief commentary available in the flash release. This appears to be somewhat driven by the volatile package holidays component though (10.0% Y/Y vs 8.5% prior, 12.5% M/M).
• Non-energy industrial goods softened slightly to 0.8% Y/Y (vs 1.0% prior), in line with wider Eurozone dynamics. However, expected pricing signals from the European Commission’s industry survey suggests this disinflation should stall in the coming months.
• Processed foods inflation fell slightly to 3.9% Y/Y (vs 4.2% prior), while unprocessed foods remained elevated at 4.7% Y/Y (steady vs May). Energy HICP softened a little to 6.0% Y/Y (vs 7.9% prior).
• The proportion of components with below 2% Y/Y inflation rates remained at 52% in June, with only 11% of categories now registering annual rates above 6% (vs 13% in May).