Spanish inflation turns positive for the first time in two years amid ongoing political deadlock

Consumer prices in Spain turned positive for the first time in two years, although falling short of analysts’ expectations in midst of an ongoing political deadlock that has left the country without a stable government for nine straight months.

Spanish consumer prices rose 0.8 percent from the previous month on European Union's harmonized basis, up from no change in August, but still slightly below the 0.9 percent rise forecast by economists, data released by INE-National Institute of Statistics showed Thursday.

Further, on an annual basis, consumer prices climbed 0.1 percent, the first rise since 2014, up from a 0.3 per cent decline in August, but a touch below the 0.2 percent rise expected by economists.

"We expect the final print to show stable annual food, alcohol and tobacco price inflation and slightly higher core inflation (0.8 percent y/y, up from 0.7 percent in August) due to higher restaurant and hotels prices," said Gizem Kara, BNP Paribas.