Balearic inflation hits 4.3 per cent

Inflation in the Balearics is spiralling out of control, last month the cost of living rose by 0.4 per cent, twice the national average, taking 12-month inflation rate to 4.3 per cent and since the start of year to 4.1 per cent. Prices last month in the Balearics shot up as consumers started to think about Christmas. The sharpest rise was the 8 per cent rise in the cost of clothing and footwear while communications, transport and entertainment costs fell slightly. However, this year, clothing and footwear prices have risen by nearly nine per cent, bar and restaurant prices by just over six per cent - only in the increasingly competitive communications market have costs fallen by five per cent. Elsewhere in Spain, consumer prices rose at the slowest pace in four months in November as energy prices declined on lower crude oil prices. The consumer price index climbed 0.2 percent in November from October, and 3.9 percent from a year ago, as calculated by European Union methods. But Spain's annual inflation has been above the average rate for the 12 countries sharing the euro for the past 15 months. Europe's fifth biggest economy risks losing customers and clients for its goods and services to its neighbours because its prices are rising more quickly, especially in the Balearics where chambers of commerce and tourism experts have admitted that the runaway rate of inflation is damaging the region. “If you make products or offer services similar to those your trade partners make, you're going to lose out to lower-price competitors,” said Nuria Ortiz, an economist at Banco Popular Espanol. The euro countries' annual inflation rate in November was 2.2 percent while Britain is aiming to end the year at around 2.5 per cent, which will be nearly half the Balearic rate of inflation.