The inflation of 6.5%, the level at which it closed in December and which, despite falling two tenths with respect to the initial estimate, is the highest rate in nearly 30 yearsaffects many variables. In addition to reducing the purchasing power of salaries waves pensions, also has effects on the saving or the rentals.
Although the European Central Central Bank (ECB) began by assuring that the rise in the general level of prices was due to a temporary phenomenon linked to the increase in the cost of energy, now he admits that it can be transferred to the economy as a whole and slow down the recovery. In addition, it fuels the demands for the recovery of purchasing power by the unions and brings closer rather than further possible increases in interest rates, as the Federal Reserve has already announced in the US, where inflation stood at 7%.
Inflation erodes the purchasing power of salaries. The collective agreements signed last year leave a balance of average wage increases of 1.47%, five points less than the annual inflation rate in December and half the average inflation for the year, around 3%. Salaries face 2022 with collective bargaining partially blocked by this inflationary spiral and by the lack of understanding at the highest level between the CEOE, CCOO and UGT, which have been pending for a year to address a new ‘agreement of agreements’ to guide to collective bargaining.
As it happens with salaries, also the saving loses value with rising inflation. L the remuneration of the accounts and deposits is practically nil, since the price of money remains at 0%. The 100 euros from when the year began are worth 6.5% less today and they will hardly find a remuneration that compensates or exceeds it. The only way is to take greater risks in the stock market. Currently, the money that is in bank accounts and deposits experiences a return (so to speak) of 0.01% when it has a term of up to one year; 0.32% between one year and up to two and 0.07% in terms of more than two years, according to data from the Bank of Spain referring to November. In government bonds, 12-month Treasury bills returned a negative 0.59% 12-month return last year and 5-year bonds -0.18%. The Ibex, the main indicator of the Spanish stock market, offered 7.9% last year, but just as it goes up, it goes down.
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The pensions It is another income that is affected by inflation. Pensioners will benefit from a payment to compensate for the deviation with respect to the estimated inflation that served to update them in 2021, 0.9%. In any case, they will not recover everything that prices have risen, 6.5% per year, but the reference will be the average inflation from December 2020 to November 2021, around 2.5%, as forecast by the partial reform agreed by social people. In 2022, the benefits must be revalued from this level. Taking into account the evolution that the consumer price index (CPI) is having, it is foreseeable that in 2022, the beneficiaries will also have to receive a compensatory payment if prices skyrocket as is happening in the current year.
Another income that is affected by the CPI is rentals. And that’s good news for landlords, but bad news for renters. Those who have a contract that is reviewed in December will see their rent increase by 6.5%, which is usually the reference set in the contracts, that is, the definitive year-on-year rate of inflation, two tenths less than what was estimated 15 days ago . In this way, a rent of 700 euros would become 745.50 euros, that is, 45.50 euros more per month and 546 euros more per year. In Barcelona, with an average rent of 1,064 euros per month for an 80 square meter flat, the increase would mean paying 1,133.16 euros. In Madrid, for a rent of 1,022 euros per month for a house of the same area, the rent would be 1,088.43 euros, according to data from the Barcelona City Council and the Idealista portal.
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