Amid the energy shock due to the war in Iran, the CPI in July stood at 3.5%, which represents an increase of three tenths compared to what was expected by consensus and against the figure recorded in June. The INE has explained that the behaviour of the indicator in July is due to the rise in prices of fuels and lubricants for personal vehicles as well as electricity. Thus, inflation in Spain has now been above 3% for five consecutive months, reaching its highest peak in more than two years.
For analysts at Avanza Previsión, "this unexpected rise breaks the plateau in which the Spanish economy seemed to have settled and brings back to the forefront the shadow of inflation that refuses to yield".
Despite the figures, the Ministry of Economy, Trade and Business has highlighted that the Response Plan to the impact of the war in Iran, which is still being deployed, has achieved its objective and has managed to cushion more than 60% of the price increase due to this external shock. At the end of June, the VAT on fuels was recovered, but the government partially extended the measures (adjustments of €0.15/litre in July, which will be reduced to €0.10/litre in August and the gradual elimination of the Energy Production Tax on Electricity).
For its part, the underlying inflation, which excludes unprocessed food and energy products, rose one tenth in July to 3% annually, contrary to the reduction of one tenth that the market expected.
Bankinter's strategy estimates that the rise in inflation will be gradual towards 3.6%-3.7% by the end of Q3 2026, and +3.3% by December 2026.
In monthly terms, the CPI rose by 0.2%, four tenths less than in June. With the increase in July, monthly inflation has accumulated six consecutive months of rises. The underlying rate decreased by -0.1% monthly compared to the increase of +0.4% in the previous month.
The INE will publish the definitive CPI data for July on the next 13th of August.