International Living: The sum also rises: Hemingway enthusiasts and other tourists in Spain confront an inflation rate higher than the U.S.’s

by | Jul 6, 2022 | Stock Market

It’s an early summer afternoon in Madrid, and the world’s oldest restaurant is abuzz with a cacophony of tourist and local voices, knives and forks, bottles and glasses. But just as the famed Restaurante Botín sees business returning to normal after the Spanish capital’s pandemic lockdowns, it has another challenge to overcome: soaring inflation. Retail prices in the Iberian nation surged 10.2% in June — a 37-year high and among the loftiest inflation rates in the euro area.

Economic Report: U.S. inflation is starting to cool, this Fed-preferred price gauge signals The costs of keeping the lights on and diners cool at the 300-year-old establishment have been a strain, reported co-owner and manager Antonio González, who estimated his electricity bill is roughly 70% higher than it was just a year ago. Yet he has only passed 2% of that on to customers. “We can’t raise prices more, probably, because we survive by our clients and you can’t tell them, ‘Listen, prices are going up 10% because my costs are up that much.’ People won’t understand,” González told MarketWatch in an interview last week. Spot electricity prices in Spain averaged $162.26 per megawatt-hour between June 4 and July 4, lower than Germany’s $236.41, but more than twice the U.S.’s $72.75 during that same period, according to International Energy Agency data. Behind the doubling and even tripling of prices at times over the past year has been Russia’s invasion of Ukraine and the resulting disruption of global commodity markets. Read: Euro to slide to parity against the U.S. dollar unless natural-gas situation improves, Citi strategists warn Resting at the foot of Plaza …

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