MNI BRIEF: Spain Core CPI Higher Despite Headline Decline

Spain's headline national inflation rate fell to the lowest level in a year in December, dipping to 5.8%, the lowest since the 5.5% recorded in November 2021. However, any relief for policymakers at the European Central Bank could be short-lived, as a dive into the details shows core CPI accelerated by 0.6% m/m to a new euro era high of 6.9%.

HICP, the adjusted rate to ease cross eurozone comparisons, fell to 5.6%, down from 6.7% in November.

Eurozone HICP is expected to slow for a second month running, seen cooling to +9.6% y/y in the December flash due next Friday. Attention will now be firmly on the core print, and whether it slows from +5.0% y/y, with the latest Spanish core jump underlinining the chances of an upside surprise.