Rising electricity prices are driving up inflation.

BarcelonaPrices for consumer goods and services have risen for the second consecutive month this July. This has caused the consumer price index (CPI, the indicator that measures the cost of living for families) to register an annual growth of 2.7% this month, moving away from the 2% target set by the European Central Bank (ECB), according to provisional data released this Wednesday by the National Institute of Statistics (INE).

Thus, this July, the CPI has registered, on average, an increase of four-tenths of a percentage point compared to June, when it stood at 2.3%. Last month was the first in which the downward trend seen in previous months was broken, and inflation is now at the levels recorded at the beginning of the year, when it reached 3% in February. In just two months, the CPI has soared seven-tenths of a percentage point.

Despite the increase, the Ministry of Economy emphasizes that "this inflation trend is consistent with the strong dynamism of the Spanish economy, which remains a driver of growth among major European countries." In this regard, the gross domestic product (GDP, the indicator that measures the size of an economy) grew up Between April and June of this year, the cost of living fell by 2.8% compared to the same period in 2025, maintaining a growth rate well above the European average and in line with the last two years. "This price stability, record job creation, and rising wages are allowing families to progressively recover their purchasing power," adds the department led by Carlos Cuerpo.

Compared to the previous month, the cost of living in June fell by 0.1%, while between May and June it had increased by 0.7%.

More expensive electricity

As the INE points out, the growth recorded this July is due to the increase in electricity prices compared to the exceptional drop recorded a year ago, driven by a drop in gas prices and lower demand, which led to a considerable reduction in rates. A year ago, the CPI began to ease in July, reaching 2.8%, after having reached peaks of 3.6% (May 2024) and 3.4% (June 2024).

However, the increase in the cost of living has also been affected, although to a lesser extent, by increases in fuel prices, in line with the usual trend in summer, when the increase in travel for holidays increases pressure on prices. Specifically, in June, the rise in fuel costs following the conflict between Iran and the United States and Israel was the main cause of the increase in the CPI, a source of tension that has now been lowered. Looking only at core inflation (which excludes the most volatile items, such as energy and fresh food), the rate rose only one-tenth of a percentage point, to 2.3%.

Wednesday's advance figures do not include indicators by autonomous community. The INE will publish the final CPI data for July in mid-August, which will include the figure for Catalonia.