Power costs drive Spanish industrial prices to record high

Spanish industrial production prices rose at a record annual rate for the fifth straight month in February, pushed up by soaring energy costs, data from the National Statistics Institute (INE) showed on Friday. Fuelled by a strong post-pandemic recovery, industrial prices had been soaring in Spain even before Russia's invasion of Ukraine exerted additional pressure on power costs.

Spanish industrial production prices rose at a record annual rate for the fifth straight month in February, pushed up by soaring energy costs, data from the National Statistics Institute (INE) showed on Friday.

Fuelled by a strong post-pandemic recovery, industrial prices had been soaring in Spain even before Russia's invasion of Ukraine exerted additional pressure on power costs. Prices rose 40.7% in February, the highest level since the data series began in January 1976, led by a 114.4% increase in energy costs compared with the same month last year.

Capital goods rose 4.6%, boosted by increased costs facing carmakers, INE said. Companies tend to pass on industrial price rises to customers, fuelling inflation. In recent months, energy prices and inflation have soared in European countries, with Spanish inflation is running at its fastest pace in 35 years.

Russia's invasion of Ukraine and the ensuing economic fallout has dented hopes that price rises will ease any time soon and the European Union's southern countries, including Spain, have called for the bloc to adopt common energy policies to face the situation.