New study finds uneven impact of changing energy costs

Energy prices more likely to affect product prices than wage increases

Bank of Spain
The Bank of Spain
Jennifer Delaney

A hike in energy prices increases underlying inflation twice as much as an equivalent decrease reduces it, says new research published by the Bank of Spain.

Underlying inflation, which excludes energy and food, responds “more markedly” to a large rise in energy prices than to a large fall, the paper finds.

“At its height (around 12 months), the inflationary impact of a positive shock is around double that of a negative shock,” the authors say. They highlight that the energy component of European

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