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News: Spain hit by New Year shock

Tue, 08 Jan 08

Spanish inflation has rocketed to its highest level in a decade...

In December, the inflation rate rose to 4.3 percent, the highest since the European-standard index was introduced in 1997, the Labor Ministry said. The stark rise was led by higher food and energy costs.

Consumer confidence fell to a record low as Spaniards worried about rising food prices and mortgage rates after the heaviest period of household borrowing in Spain's modern history after it joined the euro. 

Prices jumped even with unemployment rising for a third month, as a softening real estate market led to a 13 percent increase in benefit claims by construction workers, a separate report showed.

 

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