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Inflation in Spain hits highest level in three years as fuel prices skyrocket
The Region of Murcia matches the national rate while Andalucía stays slightly below
The cost of living in Spain has taken another turn for the worse, with inflation climbing to 4.3% in August and reaching its highest level since February 2023.
The latest figures from the National Statistics Institute (INE) confirm the preliminary estimate released at the end of August, with the annual inflation rate rising seven-tenths of a percentage point from July.
It's a figure that's likely to feel particularly familiar to anyone who has filled up the car, done the weekly supermarket shop or paid the latest household bills.
Fuel prices are a major part of the problem. Transport inflation jumped by more than three percentage points to 9.5% nationally, its highest level since August 2022, with the INE pointing to higher prices for fuels and lubricants for private vehicles.
There are some noticeable regional differences. In the Region of Murcia, transport prices were up an even sharper 11.9% year-on-year in August, while the overall inflation rate matched the national figure at 4.3%.
Andalucia, meanwhile, recorded a lower overall inflation rate of 4%. However, transport costs there were still up 10%, meaning motorists in both regions are facing above-average pressure from rising transport prices.
The regional figures also show that food prices aren't rising at the same rate everywhere. Food and non-alcoholic beverages increased by 1.9% in Murcia and just 1.4% in Andalusia, compared with 2.3% across Spain as a whole.
Oil prices are adding to the pressure. The price of a barrel has climbed back above $100 in recent days, keeping fuel prices elevated. The Ministry of Economy has attributed the trend to the ongoing energy shock linked to the war in Iran, together with a base effect from August 2025, when fuel prices were falling.
The latest increase comes just weeks before the government's current fuel support measures are due to expire. The economic package includes a 20-cent discount on diesel and 5 cents on petrol, but the measures are currently scheduled to end on September 30.
The Spanish Confederation of Service Station Owners (CEES) has called for the subsidies to be extended. Economy Minister Carlos Cuerpo has also assured that the government "will continue to support families in the face of price increases", although no extension has yet been confirmed.
Fuel isn't the only source of upward pressure. Core inflation, which excludes energy and unprocessed food, eased slightly to 2.9% in August but remains well above the European Central Bank's 2% target.
Funcas is warning that inflation could remain high for several more months. Its central forecast puts the rate at 4.9% in September, with inflation expected to remain above 4% during the following months. The foundation forecasts average inflation of 3.6% for 2026 and 2.9% for 2027, although those estimates depend heavily on developments in the Middle East and the future direction of energy prices.
Food is currently offering some relief compared with other household costs. National food inflation stood at 2.3% in August, two percentage points below the overall inflation rate, with fruit and nuts among the products contributing to the increase because their prices fell by less than they had a year earlier.
Inflation actually started 2026 at much more moderate levels, close to the ECB's 2% target, before the conflict in Iran and disruption to supplies of key raw materials pushed up the cost of crude oil, gas and fertilisers.
That pressure has now worked its way through into a much wider range of household costs, with August marking the sixth month since the start of the tensions.
Every autonomous community recorded positive annual inflation in August, although the differences between regions were significant. Cantabria recorded the highest rate at 5.1%, followed by Galicia at 4.8% and Castilla y León at 4.7%.
At the other end of the scale, the Canary Islands recorded the lowest rate at 3.8%, followed by La Rioja and Asturias at 3.9%. Andalucia's 4% was therefore below the national average, while Murcia's 4.3% was exactly in line with it.
Despite the latest increase, the government points out that cumulative inflation since February 2022 remains slightly lower in Spain than across the eurozone. Prices have risen by 19.3% in Spain over that period, compared with 19.6% across the eurozone.
Image: Archive
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