Spain Inflation Rate Hits Two-Year High in July

Spain’s inflation rate accelerated to 4.3% year on year in August 2026, up from 3.6% in July and slightly above market expectations of 4.2%, according to a preliminary estimate. It was the highest inflation rate since February 2023, driven largely by rising energy prices following an escalation in US-Iran tensions that pushed crude oil prices higher. The EU-harmonized inflation rate also climbed to 4.5%, its highest level since early 2023 and more than double the European Central Bank’s 2% medium-term target. Meanwhile, core inflation, which excludes volatile components such as unprocessed food and energy, edged down to 2.9% in August.

Spain's annual inflation rate was revised slightly higher to 3.6% in July 2026 from a preliminary estimate of 3.5% and June's reading of 3.2%. This marked the highest rate since May 2024, driven mainly by fuel prices, particularly diesel (15.7% vs 14.1%) and petrol (7.3% vs 1.3%), amid the partial closure of the Strait of Hormuz. Electricity prices also rose faster (8.4% vs 6%) due to strong consumer demand during the successive heatwaves. The core inflation rate, excluding unprocessed food and energy, also rose to 3.0% from 2.9% in June, in line with estimates and matching May’s near two-year peak. The EU-harmonized annual rate hit 3.9%, its highest since February 2023, up from 3.6% in June and above the preliminary estimate of 3.8%. On a monthly basis, consumer prices rose by 0.3%, up from the earlier estimate of 0.2%, but easing from the 0.6% increase recorded in June. The harmonized index was flat, compared to the earlier reading of a 0.1% decrease and after a 0.6% rise in June.

Spain’s consumer price inflation rose to 3.5% in July 2026, up from 3.2% in June and above the 3.4% market forecast, according to preliminary data. This is the highest rate since May 2024, fueled by rising costs for fuels, lubricants, and electricity, as renewed Middle East tensions push energy prices higher again. The core inflation rate, excluding unprocessed food and energy, also climbed to 3.0%, from 2.9% in June, matching May’s near two-year peak. Meanwhile, the EU-harmonized inflation rate reached 3.8%, surpassing the 3.7% expectation and remaining well above the European Central Bank’s 2.0% target.