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ECONOMY

Spain’s inflation slows down significantly in September

Spanish inflation eased in September to 9 percent from a nearly four-decade high, thanks to a drop in electricity and fuel prices, provisional data from the National Statistics Institute (INE) showed Thursday.

inflation spain
People cross Madrid's main street Gran Vía. Inflation had remained in double digits since June, a level not seen since the mid-1980s. (Photo by GERARD JULIEN / AFP)

Russia’s invasion of Ukraine has sent inflation soaring worldwide, prompting central banks to hike interest rates in an effort to rein in consumer prices.

Spain’s annual rate stood at 9.0 percent in September, down from 10.5 percent in August.

Inflation had remained in double digits since June, a level not seen since the mid-1980s.

“This development is largely due to the fall in prices of electricity which went up in September 2021,” the INE said in a statement. The definitive figures will be released next month.

“It has also been influenced, albeit to a lesser extent, by the fall in fuel prices,” it added.

Core inflation, which excludes certain prices such as energy, fell by 0.2 percentage points to 6.2 percent, it said.

The government of Socialist Prime Minister Pedro Sanchez has in recent months rolled out aid packages to help households and businesses weather the inflationary pressure, which has soared across Europe due to the Ukraine war.

It has introduced free public transport, subsidised petrol prices and temporarily slashed the sales tax on gas among other measures, in moves that are expected to cost some €30 billion ($30 billion) — or 2.3 percent of Spain’s gross domestic product.

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ECONOMY

Why the UK’s Royal Navy ships are being built in Spain

Spain's internationally renowned shipbuilders will help make three new supply ships worth €1.8 billion for the British Navy.

Why the UK’s Royal Navy ships are being built in Spain

Navantia, Spain’s state-owned shipbuilding company, will play a key role in the construction of three new British Navy supply vessels.

The Team Resolute consortium, of which Navantia’s UK subsidiary is a member along with British firms BMT, Harland & Wolff and Appledore, was awarded the €1.8 billion (around £1.6 billion) contract to make three 216-metre auxiliary ships that will carry supplies and ammunition to British Navy aircraft carriers, destroyers and frigates.

The ships will be among the largest in the British fleet, smaller than only the Queen Elizabeth aircraft carriers.

In Spain, the shipbuilding work will take place at the internationally renowned Navantia shipyard in Puerto Real in Cádiz. Navantia have previously built ships for the Saudi Navy, and in 2016 built two ships for the Australian Navy, though they were mostly built in Navantia shipyards in Ferrol, Galicia.

Navantia’s president, Ricardo Domínguez, said in a statement that “It is an honour for Navantia and Navantia UK to participate in this programme, which will benefit from our excellence in shipbuilding and our programme management and technology transfer capabilities.”

Construction in the UK will take place at the Harland & Wolff shipyards in Belfast and also in Appledore, on the Devon coast.

According to the contract, production should begin in 2025 and the three ships, which will each be the length of two football pitches, should be operational by 2032.

Xiana Méndez, Spain’s Secretary of State for Commerce, described the contract as “excellent news” for Spain, stressing the strength of Navantia’s international portfolio not only for the clear “economic effects” but the “strategic alliances” it allows Spain to foster on the international stage.

The contract makes Navantia one of several important Spanish companies currently operating in the United Kingdom, along with energy company Iberdrola, Telefónica (O2), the Iberia Express airline, which is part of IAG, as well as transport infrastructure group Ferrovial, which operates at Heathrow airport, and airport operator Aena, which runs Luton airport.

READ ALSO: CONFIRMED: Deal on UK licences in Spain agreed but still no exchange date

Navantia’s role in the shipbuilding consortium is certainly encouraging for Spain’s relationship with Britain in the post-Brexit world. Spanish newspaper La Vanguardia reported the news with the headline: ‘Navantia beats Brexit.’

Spanish Armada?

It has not been received quite as positively in the United Kingdom, however, with shadow Defence Minister Chris Evans claiming that the outsourcing of parts of the construction process to a Spanish firm serves to “create a new Spanish Armada, over 430 years since the last one lost.”

“It is also highly unusual for warships to be built abroad due to security implications” he added. “This is about creating British jobs for British workers, with British ships, using British steel.”

Defence Minister Alex Chalk defended the contract and Navantia’s involvement, suggesting that “some components are built overseas” and that in “in modern engineering designs it was ever thus.”

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