Spain's inflation fell to a lower than expected 2.3 percent in July from 2.5 percent in June, official data showed on Monday, but price rises are still seen picking up sharply in coming months.
The fall in Spanish inflation, one of the highest eurozone rates, was accompanied by robust June retail data that further dispelled fears of a steep slowdown in the Spanish economy as interest rates rise and its property boom ends.
"It surprised me: most people were expecting 2.4," said Jose Garcia Zarate at 4Cast in London, adding the fall in the rate was due to a combination of comparisons with price spikes in previous periods and seasonal factors.