The most expensive September: energy, back to school and mortgages impact family economies

BarcelonaSeptember 1st marks the beginning of the political, social, and educational year. One could also speak of a new school year for household economies which, in 2026, appears to be tough, with a generalized price increase that directly impacts families' spending power, after a particularly expensive summer mainly due to the rising cost of energy.

The fact is that the war in Iran is directly affecting family economies, with two very clear aspects: energy is becoming more expensive due to high oil prices and, in addition, general inflation, that is, the overall price level, is rising as it had not happened in three and a half years. Fuels were the main cause of the inflation increase in August to 4.3% in Spain, but other products are also increasing in cost, especially food, which is heavily affected by the war in Ukraine, as this country and Russia are the world's main grain suppliers. The lack of wheat and other cereals is raising the price of human food, but it also makes animal feed more expensive, which means that not only cereal-based foods become more expensive, but also animal protein.

To this must also be added the increase in the cost of fertilizers, which also drives up the price of cereals and other agricultural products worldwide. This increase in fertilizer prices is mainly due to the closure of the Strait of Hormuz because of the United States war against Iran.

A war that will also drive up energy prices. Although the price of a barrel of oil has not reached the highs experienced in 2022 when the war in Ukraine broke out, it has remained high enough for, for example, in Spain, to chain already eight consecutive weeks of rising gasoline and diesel prices.

In fact, diesel, since this Tuesday, is subsidized again by 20 euro cents per litre. This is because, although the Spanish government decided to gradually withdraw fuel subsidies between July and September, as diesel fuel increased by more than 15% in the seventh month of the year, the safeguard clause came into effect, which provided for an increase in the subsidy. Thus, diesel fuel will once again be subsidized at 20 cents per litre from this Tuesday, but the opposite is happening with gasoline: as it did not exceed a 15% increase, the subsidy is reduced to five cents per litre.

Light and mortgages

Another effect of the war in Iran is the rise in the price of natural gas. This has directly impacted the electricity bill for the month of August – and may continue into September – that has increased by 19% on average. This occurs because, even though photovoltaic generation increases, during hours when there is no sun, combined cycle plants come into operation, which have to pay more for gas. Along with this fact, demand, with heatwaves, has also increased and also becomes a factor that drives prices up.

But supplies are not the only thing getting more expensive. Due to the inflationary trend, Euribor, the index to which most mortgages in Spain are referenced, closed August close to 3%.This will make mortgages more expensive, especially variable ones –but also new fixed-rate ones–, and the trend could continue upwards if the ECB, in next week's meeting, decides to raise benchmark rates to curb inflation.

The last big impact is for families with children. The return to school costs no less than 500 euros per student, although with many differences depending on the autonomous community where they live and, also, on the type of school the children attend. Private ones can triple the cost of public ones. When it comes to buying school supplies, you need to compare different offers to find the cheapest place. Another tip is to avoid compulsive purchases: there is absolutely necessary school material, but manufacturers and shops also try to increase the purchase ticket with tempting offers and products that dazzle the little ones and are not entirely necessary. A third element that can help families save is to anticipate purchases and split the payment, so the impact is not so great.