Spain's inflation hits 3.5% in July, complicating the withdrawal of aid

Inflation jumps to 3.5% in July and tests the withdrawal of aid

Are we facing a new price surge or just a bump? Spain's flash CPI for July stands at 3.5%, three tenths higher than June, marking five straight months above 3%. The INE (Spain's statistics office) points to fuel and electricity as the main culprits, with the Ormuz crisis as the backdrop.

While Spanish households are turning to consumer credit —over 7 billion euros this summer, double the figure from a decade ago— the debate over ending the anti-crisis measures is intensifying. The government has withdrawn part of the aid, and prices show no mercy.

The maximum pension and the gap with workers

The maximum pension in Spain stands at 3,359.60 euros gross per month (14 payments a year), around 47,000 euros annually. With the expected 3% increase for 2027, top pensioners would gain about 100 euros more per month, while an average worker barely exceeds 1,100 euros. The gap keeps widening, and the irony is hard to miss: those who earn the most without working see their benefits increased, while those who work struggle to make ends meet.

Will the ECB raise rates?

Some analysts are calling for an ECB rate hike, as the central bank has not moved in a long time. Core inflation and rising energy costs are putting on pressure, but any move by the central bank could cool the economy further. In the background, public debt and private credit are hitting record highs.

Conclusion: the data speak for themselves, but the official narrative insists everything is under control. The average citizen notices it at the grocery store, and statistics don't lie. Let's hope the government takes note while civil servants and pensioners await their annual raise.