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Food prices in Spain post record rise in October

Food prices in Spain posted a record rise in October, keeping the cost of living painfully high even as lower energy costs spurred a drop in inflation, official data showed Tuesday.

SPAIN-FOOD-PRICES
The surging cost of food especially hits low-income consumers in Spain who spend a bigger chunk of their household budgets on groceries. (Photo by PIERRE VERDY / AFP)

Overall food prices climbed 15.4 percent from a year earlier, the biggest increase since the statistical series began in January 1994, according to the National Statistics Institute.

Food prices were up 2.3 percent over the previous month.

The cost of fresh vegetables jumped by 25.7 percent on an annual basis, eggs were up 25.5 percent, milk increased 25 percent and the price of grains rose 22.1 percent.

Food prices have risen globally since Russia’s invasion of Ukraine in February reduced grain shipments from one of the world’s top suppliers.

An extreme drought and consecutive heatwaves in Spain this year have also slashed agricultural output in the country, a leading producer of fruit and vegetables in the European Union.

The overall inflation rate slowed to 7.3 percent in October, down from 8.9 percent in September and moving further away from a 38 year high of 10.8 percent in July.

This was due to a drop in the price of electricity, which fell 22.5 percent over the previous month, and “to a lesser extent” a 6.4 percent fall in the cost of gas, the statistics institute said.

The surging cost of food especially hits low-income consumers who spend a bigger chunk of their household budgets on groceries.

Food banks have reported a surge in demand this year as the price of groceries has risen.

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MONEY

What’s the maximum amount you should have in a current bank account in Spain?

Most people in Spain only have one bank account and use it for all different purposes, but what happens when you manage to save up a bit? Here's the official advice on Spanish savings accounts.

What’s the maximum amount you should have in a current bank account in Spain?

Our bank accounts are used for many day-to-day activities such as paying bills, receiving paychecks and buying groceries, but is there a maximum amount of money you should have in your account at one time? And what should you do if you go over this amount?

While there isn’t an official maximum amount that you should have in your current account, the Organisation of Users and Consumers (OCU) advises that your current account only be used for certain amounts and everything over that should be put into different accounts.

According to the OCU, in your main bank account, where you receive your salary, pension or other significant payments, you should have a maximum of three months of your salary.

So for example, if you earn the minimum wage of €1,000 per month in Spain, then the maximum you should have in your current account is €3,000.

READ ALSO – Ask the expert: What are the best UK banks for Brits in Spain?

They advise that you don’t want to go too much under this amount either because you want to make sure you have accessible cash to use when you need it, as well as for possible emergencies. They also suggest checking your account balance regularly to make sure you don’t go into the red and don’t incur extra bank fees.

But equally, you don’t want to have too much in your account and keep all your savings in one place for security reasons.

Savings accounts

The OCU recommends opening a savings account or cuenta ahorro for any amounts greater than three times your salary, rather than keeping it all together in your current account.

Most banks have various types of savings accounts with different interest rates and different fixed terms where you’ll have to keep your money in for a certain amount of time.

For money you’ll need in the short term, but not right away, the OCU suggests putting it into a fixed-rate savings account (cuenta ahorro plazo fijo) for 12 months, but warn that if you need the money before the year is out then you may have to pay fines take it out.

For money that you know you won’t need in the short term, the OCU advises putting it into a long-term investment or a fixed-rate savings account for longer than one year. “For amounts that you don’t plan on touching in the next five or ten years, it’s advisable to make a little profit on it, however, keep in mind there may be seasons in which you suffer some losses too”, they said.

Savings over €100,000

For anyone that has savings over €100,000 in any type of account, it’s important to distribute the amount over various accounts warn the OCU.

This is because during an economic collapse or bank failure, you will not be covered by the EU Deposit Guarantee Fund, which is only able to guarantee the repayment of your money up to €100,000.

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