Inflation increased by 0.4 points in July, according to the INE, driven primarily by energy costs.
Consumer Price Index Rebounds in July 2025
The Consumer Price Index (CPI) saw a rebound in July 2025, with a year-on-year increase of 2.7%. This rise was primarily driven by a surge in core inflation, which excludes food and energy, reaching 3.1% - the highest level in five months.
The increase in core inflation can be attributed to firmer pricing on tariff-affected goods, stronger underlying consumer demand, and increases in areas such as medical care, airline fares, recreation, household furnishings, and used cars.
In the realm of food prices, there was an increase of about 2.7% year-over-year. Notable price jumps were seen in roasted coffee (up 14.8%) and ground beef (up 11.5%), although some items like eggs fell month-over-month but remained substantially up yearly.
Energy prices, on the other hand, declined by 1.6% over the last year. This decrease was due to lower gasoline, natural gas, and electricity costs, which moderated the headline CPI rise.
Compared to previous months in 2025, the 2.7% annual increase in July is somewhat higher, with core inflation's 3.1% reading up from 2.9% in June, indicating a strengthening in the underlying inflation rate.
It's important to note that energy price declines in July contrasted with some past periods of energy-driven inflation spikes, helping keep headline inflation moderate.
The CPI month-over-month rose 0.2% in July, consistent with forecasts and slowing slightly from June's 0.3% gain. Shelter costs also increased moderately by 0.2%, contributing to the monthly rise.
The 'Transport' group, which includes fuels, saw an increase of 1.3 points in July due to the rise in prices of fuels and lubricants for personal vehicles and, to a lesser extent, combined passenger transport. The 'Housing' group, which includes electricity, rebounded by 2.5 points in July, reaching 6.7%, due to increased electricity prices in July.
The 'Leisure and Culture' group also experienced an increase in July, with a variation of 1.7% due to the increase in prices of tourist packages. Fuels also influenced the price increase, following the usual summer trend.
Interestingly, the 'Clothing and Footwear' group experienced a decrease in July during the sales period, with a rate of 0.2% and a negative impact of -0.351 on the general index.
All communities presented positive IPC rates at the end of July, with the highest being in the Balearic Islands (3.5%) and the lowest in the Region of Murcia (2%).
[1] Source: Our website [2] Source: Consumer Price Index Report, July 2025 [3] Source: Bureau of Labor Statistics, July 2025 [4] Source: European Central Bank, July 2025
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