The inflation rises hard

   The inflation there are repuntado nine tenths, more than 30 % and it has been located in 3,6 % as the National Institute of Statistics (INE) has done publicly in the anticipated indicator of the harmonious IPC. But it will be necessary to wait on November 14 to obtain the final fact of the national IPC. The uncontrolled inflation means an excessive increase of the prices of the goods and services. To control the inflation the European Central Bank (BCE), it resorts to raise the price of the money, so that to prevent the excessive circulating money from leading to raising the prices. But we are before an intersection, since the deceleration of the economy and the increase of the indebtedness on the part of the families, indicates that it would be positive to lower the prices of interest, decision that would be opposite to the one that must take to control the inflation that has risen excessively.

   One of the prime movers of the upturn of the inflation seems to be the strong increase of the oil prices, since it has broken the barrier of 90 dollars for barrel and takes an increase of 15 % in only one month.

   This fact of the inflation, it has surprised the government, since although they were waiting for an increase, nobody was predicting that it was so spectacular. Also the strengthening of the euro with regard to the dollar, is serving so that the increase of the oil does not move of sudden form to the countries of the single currency. Every time more dollars can be bought with euros, this way the increase of the oil price that is quoted in dollars can be mitigated by the increase of the euro with regard to the dollar. 

   But let's not center on indicating to the oil as only one guilty of the upturn of the inflation since the food sector has great grade of participation in this inflationary process. Many companies of the feeding dedicated to the milk and his derivatives, bread, cattle companies, etc they have pointed out that the increase of the cereals takes them and it will lead them to increasing the prices of his products, therefore the shopping basket is going to suffer strong increases. Fortunately the cereals harvest in Spain this year has been very good, but it it has not been in other countries of the Euroarea.

   The increase of the inflation can have very negative effects for the economy, since it implies raising the pensions to avoid the loss of purchasing power on the part of the pensioners that implies the widespread increase of the prices, that is to say, the inflation.