Rate exceeds 3.2% eurozone average as ECB weighs October decision
Spain’s annual inflation rate reached 5.0% in September, according to European Union-harmonized data published Tuesday by INE, the country’s statistics agency. The reading is the highest since February 2023 and the eighth consecutive monthly increase.
The September figure rose from 4.6% in August, INE data show. It came in slightly below the 5.1% expected by economists polled by The Wall Street Journal.
Spain’s inflation now substantially outstrips the eurozone average. Annual inflation across the 21-nation currency bloc stood at 3.2% in August, well above the 2% level the European Central Bank targets. The ECB raised its key interest rate earlier this month, according to The Wall Street Journal.
INE cited two main drivers of the September reading: a buoyant summer tourism sector that kept package-holiday prices from falling as much as they did in September 2025, and rising fuel costs that reversed a year-ago decline in the same month. High immigration in recent years has also brought more workers into the Spanish economy, boosting domestic consumption and adding to price pressures, according to The Wall Street Journal.
ECB President Christine Lagarde said Monday that the energy-price shock linked to the war in Iran was too large to look through, though a measured policy response is appropriate to keep inflation in check, according to The Wall Street Journal.
The higher Spanish reading could support calls for a rate hike at the ECB’s October meeting. Investors are about evenly split on the chance of a rate increase, according to LSEG data cited by the Journal.
Spain’s economic growth has continued to outpace much of the rest of the eurozone, The Wall Street Journal reported, even as the country records one of the highest inflation rates in the currency area.