A tentative sign that inflation may be pinching the Spanish consumer. A measure of retail sales in Europe’s fourth largest economy fell for the first time since 2014 at the start of the year–its first contraction after 28 consecutive months of growth, Bloomberg reported. Month on month retail sales fell 0.1% in January after a 0.9% expansion at the end of 2016 and were up just 0.1% on a year-on-year measure. Economists had expected sales to be 2.5% highest in January compared to the same month in 2016. The surprise dip comes as Spain’s inflation rate has surged above 3% in 2017–a far higher acceleration in prices than seen in the eurozone’s other major economies in recent months. Higher inflation threatens to choke off Spain’s impressive economic recovery following a deep recession in 2012/2013. The economy expanded at a 0.7% quarterly pace at the end of the year, up 3% on a year on year measure.
